Duty abatement under excise closure rules cannot be denied without evidence of production during the shutdown period.

Abatement of duty under Rule 96ZO read with Section 3A could not be denied merely because the electricity meter was found defective when production restarted. The record indicated that the assessee had given contemporaneous intimation to the electricity department, the Revenue made no enquiry with that department, and Central Excise officers found the factory closed during the relevant period. In the absence of evidence that MS ingots were manufactured during the closure period, the defective meter by itself did not establish continued production. The denial of abatement was therefore unsustainable, and duty abatement was due.

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Issues: Whether abatement of duty under Rule 96ZO of the Central Excise Rules, 1944 read with Section 3A of the Central Excise Act, 1944 could be denied on the basis of a defective electricity meter and alleged production during the closure period.

Analysis: The appellants had satisfied the conditions prescribed for abatement, and the record showed that a contemporaneous intimation had been sent to the electricity department regarding the incident in the meter room. The Revenue did not make any enquiry with the electricity department about the alleged defect. The factory had been found closed when visited by Central Excise officers, and there was no evidence that MS ingots were manufactured during the period of closure. A mere defect in the meter on the date of recommencement of production did not by itself establish that production had continued during the closure period.

Conclusion: The denial of abatement was unsustainable, and the appellants were entitled to the duty abatement.

Ratio Decidendi: Abatement cannot be denied in the absence of evidence of production during the closure period merely because the electricity meter was found defective when production restarted.

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