Abatement of duty requires strict stock declaration compliance, but a prior declaration may suffice during proven continuous closure.

Abatement of duty under Section 3A(3) depended on compliance with Rule 96ZP(2), including intimation of closure and declaration of stock position. For the uninterrupted period 1-4-1999 to 1-5-1999, a prior declaration at the start of a proven continuous closure was treated as sufficient, so the denial was set aside in favour of the assessee. For 8-5-1999 to 19-5-1999, no declaration of physical stock was filed on the date of closure, and the mandatory conditions were not met, so the abatement claim was rejected. The challenge succeeded only in part.

---

---

Issues: (i) Whether abatement of duty was admissible for the period 1-4-1999 to 1-5-1999 despite the absence of a fresh declaration of closing stock on the date of restart, when the factory closure was continuous and had already been intimated earlier; (ii) Whether abatement of duty was admissible for the period 8-5-1999 to 19-5-1999 when no declaration of physical stock was filed on the date of closure.

Issue (i): Whether abatement of duty was admissible for the period 1-4-1999 to 1-5-1999 despite the absence of a fresh declaration of closing stock on the date of restart, when the factory closure was continuous and had already been intimated earlier.

Analysis: Abatement under Section 3A(3) of the Central Excise Act, 1944 is available only on compliance with the conditions in Rule 96ZP(2) of the Central Excise Rules, 1944, including intimation of closure and declaration of stock position. The requirement to intimate physical stock on closure is substantive and ordinarily non-compliance disentitles the claim. However, where the closure is shown to be continuous and the department had already been informed of the closure from an earlier date, the declaration made at the commencement of the continuous closure can suffice for the later uninterrupted period, particularly when no change in stock or meter reading is alleged at restart.

Conclusion: The claim for abatement for 1-4-1999 to 1-5-1999 is allowed and the rejection is set aside, in favour of the assessee.

Issue (ii): Whether abatement of duty was admissible for the period 8-5-1999 to 19-5-1999 when no declaration of physical stock was filed on the date of closure.

Analysis: For this period, the assessee admittedly did not file the required declaration of physical stock on the date of closure. The conditions prescribed by Rule 96ZP(2) are mandatory, and the absence of the stock declaration constituted non-compliance. The claim could not be saved by reference to registers or by general assertions of no production.

Conclusion: The claim for abatement for 8-5-1999 to 19-5-1999 is rejected and the order of denial is upheld, against the assessee.

Final Conclusion: The appeal succeeds only to the extent of the first disputed period and fails for the second disputed period, resulting in a partial allowance of the assessee's challenge.

Ratio Decidendi: While compliance with the stock-intimation requirement under Rule 96ZP(2) is mandatory, a declaration made at the commencement of a proven continuous closure may suffice for the uninterrupted subsequent period if no intervening break or change is shown.

---