Abatement for stenter closure cannot be denied for procedural filing order where the claim is otherwise admissible and revenue-neutral.

Rule 96ZQ(7) of the Central Excise Rules, 1944 allows abatement for closure of a hot-air stenter for at least seven continuous days, subject to the prescribed conditions and Commissioner's approval. For claims covering less than one month, the monthly duty is to be paid first and abatement claimed afterwards, but a procedural lapse in that sequence will not by itself sustain duty demand, interest or penalties where the claim is otherwise admissible on merits and the situation is revenue-neutral. The Revenue's appeals failed and the abatement relief was upheld.

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Issues: Whether an independent textile processor claiming abatement for a period of non-operation of less than one month under Rule 96ZQ(7) of the Central Excise Rules, 1944 was required to pay duty first and then seek abatement, and whether the duty demand, interest and penalties were sustainable.

Analysis: Rule 96ZQ(7), read with Section 3A(3) of the Central Excise Act, 1944, provides for abatement of duty for closure of the hot-air stenter for a continuous period of not less than seven days, subject to fulfilment of the prescribed conditions. The scheme contemplates that the claim is to be considered and allowed or disallowed by the Commissioner, and that where the claim relates to a period of less than one month, duty for the month is to be paid first and abatement claimed thereafter. At the same time, the Board's circular taking a liberal view of the provision supported the respondent's case, and there was no case made out that the abatement claims would have failed on merits if filed after payment. The factual setting also indicated a revenue-neutral situation.

Conclusion: The requirement of prior payment was treated as not warranting interference in the facts of the case, and the demand, interest and penalties were not sustainable.

Final Conclusion: The appeals by the Revenue failed and the order granting abatement relief to the respondent was upheld.

Ratio Decidendi: Where the statutory scheme permits abatement for closure of the stenter and the claim is otherwise admissible, a procedural lapse in the order of payment and claim filing will not, by itself, justify sustaining duty demand, interest or penalties, particularly in a revenue-neutral situation.

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