Compounded levy abatement depends on proof of actual closure and strict compliance with scheme conditions.

Abatement under the compounded levy scheme was available only on strict compliance with the prescribed closure conditions, including proper written intimation of closure and restart, disclosure of stock and electricity meter readings, and proof that production actually ceased for the required continuous period. The assessee bore the burden of proving actual closure. That burden was not discharged because inspection records showed the unit operating after the alleged closure notices, and electricity consumption during the claimed closure period was comparable to, and at times higher than, consumption during admitted production periods. The claim for abatement was therefore rejected and the denial of relief sustained.

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Issues: Whether the appellant was entitled to abatement from payment of central excise duty under the compounded levy scheme on the ground that the factory remained closed for the claimed period.

Analysis: Abatement under the compounded levy scheme depends upon compliance with the prescribed conditions, including proper written intimation of closure and restart, disclosure of stock position and electricity meter readings, and proof that production actually ceased for the requisite continuous period. The record showed that the unit was found running on inspection dates after the alleged closure intimations, and the electricity consumption during the claimed closure period was comparable to, and in some periods higher than, the consumption during periods of admitted production. In these circumstances, the claim of closure was not supported by the evidence. The burden to establish actual closure for the purpose of abatement lay on the assessee, and that burden was not discharged.

Conclusion: The claim for abatement was rightly rejected and the denial of relief was upheld.

Final Conclusion: The appeal failed because the assessee did not establish factual closure in accordance with the scheme conditions, and the order refusing abatement was sustained.

Ratio Decidendi: A claim for abatement under the compounded levy scheme can succeed only on proof of actual closure and strict compliance with the prescribed intimation and evidentiary conditions; contrary inspection findings and electricity usage consistent with production defeat the claim.

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