Compounded levy abatement for continuous stenter closure survived the Rule 96ZQ amendment for the pre-amendment period.

Abatement under the compounded levy scheme was available where a stenter remained continuously closed for more than seven days, and the amendment to Rule 96ZQ from 1-3-2000 did not extinguish entitlement for the pre-amendment period. Because the closure admittedly ran from 26-2-2000 to 31-3-2000, the earlier part of the closure qualified for abatement, and denial of the claim for that period was unsustainable. The amendment affected future periods only and did not retrospectively defeat abatement already accrued on the basis of actual continuous closure.

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Issues: Whether the appellant was entitled to abatement of central excise duty for the period during which the stenter remained closed, notwithstanding the amendment to Rule 96ZQ with effect from 1-3-2000.

Analysis: The claim arose under the compounded levy scheme, where abatement was admissible when the stenter remained closed continuously for more than seven days. The closure in the present case was admitted to have continued from 26-2-2000 to 31-3-2000. The change in law from 1-3-2000 altered the basis of abatement for future periods, but did not negate entitlement for the period prior to that date. The earlier Tribunal view recognised that the abatement provision operates on actual continuous closure and does not permit denial merely because the closure period straddles the date of amendment.

Conclusion: The appellant was entitled to abatement for the period prior to 1-3-2000 and the denial of the claim was unsustainable.

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