Stenter capacity and abatement rules: closure of one chamber is insufficient, and gallery length cannot be added for duty computation.

Abatement under the stenter capacity scheme is available only on complete closure of the Hot Air Stenter, not on closure of a single chamber, and only from the date the change is approved by the Commissioner. Because permission for removal of the chamber was granted later, no abatement was available for the earlier period. The text also states that gallery length cannot be included in the length of Hot Air Chambers Stenter for duty computation, as binding precedent had rejected that basis. Duty demand and penalty therefore required fresh computation on the correct stenter length, with relief limited to that extent.

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Issues: (i) Whether abatement of duty was admissible for closure of only one chamber of a Hot Air Stenter during the relevant period. (ii) Whether the length of galleries could be included in the length of the Hot Air Chambers Stenter for computing duty liability.

Issue (i): Whether abatement of duty was admissible for closure of only one chamber of a Hot Air Stenter during the relevant period.

Analysis: Under the applicable capacity determination scheme, a change in installed machinery affecting annual production capacity had to be intimated in advance and could take effect only from the date approved by the Commissioner. Abatement under Rule 96ZQ(7)(a) was available only on complete closure of the Hot Air Stenter, and not for closure of one or more chambers contained in such stenter. As permission for removal of the chamber was granted only on 11-1-99, no benefit was available for the earlier period.

Conclusion: The claim for abatement for closure of one stenter chamber was rejected.

Issue (ii): Whether the length of galleries could be included in the length of the Hot Air Chambers Stenter for computing duty liability.

Analysis: The inclusion of gallery length was held to be unsustainable in view of the binding Larger Bench decision, which had been upheld by the Supreme Court. On that basis, the duty worked out on that footing could not stand and had to be reworked.

Conclusion: The inclusion of gallery length in the stenter length was not permissible.

Final Conclusion: The duty demand and penalty required fresh computation in light of the findings, and the appeal succeeded only to that extent.

Ratio Decidendi: Abatement under the stenter capacity scheme is available only upon complete closure of the stenter as approved by the Commissioner, while gallery length cannot be included in the stenter length for duty computation where precedent has held otherwise.

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