2015 (7) TMI 1178 - AT - Central Excise

Successful Appeal Grants Abatement: Substantive Compliance Prevails Over Procedural Lapse

M/s. Vidya Ispat Udyog Pvt. Ltd. Versus C.C.E., Rohtak

The appeal was allowed in favor of the appellant, overturning the denial of abatement based on the failure to intimate electric meter reading. The Member ... Disallowance of Abatement claim - compounded levy scheme - denial on the ground that the conditions of the Rules have not been fulfilled by the appellant in-as-much-as the appellant had not intimated the electric meter reading - Held that: - The fact of suspension of production in the factory of the appellant has not been disputed in the impugned order. While claiming abatement for different periods, the appellant had clearly intimated to the Department regarding the closure of the furnace. Thus, in my opinion, the substantive right cannot be denied to the appellant - I find support from the decision of this Tribunal in the case of Aswad Steels and Alloys (P) Ltd. Vs. CCE, Meerut-I [2009 (8) TMI 185 - CESTAT, NEW DELHI], cited by the appellant that the benefit cannot be denied for the mere fact of non-disclosing of electric meter reading - appeal allowed - decided in favor of appellant. Issues:Abatement claim denial based on failure to intimate electric meter reading.Analysis:The appellant, engaged in steel production, filed an abatement claim under Rule 96ZO (2) of the Central Excise Rules, 1992. The claim was partially allowed, but a portion was disallowed due to the appellant's alleged failure to intimate the electric meter reading to the authorities. The appellant argued that due to technical issues with the DG set and lack of grid electricity supply, they couldn't provide the meter reading. They contended that the suspension of production was duly communicated to the department, relying on legal precedents to support their position.The Departmental Representative argued that the appellant failed to fulfill the conditions of Rule 96ZO (2) and Section 3A of the Central Excise Act, thus making the abatement unavailable. After hearing both sides, the Member (Judicial) found that the denial of abatement solely based on the lack of electric meter reading intimation was unjustified. The Member noted that the appellant had informed the department about production suspensions, fulfilling the substantive requirement for abatement. Citing legal precedents, including a decision by the Hon'ble Punjab & Haryana High Court, it was concluded that the failure to disclose the meter reading should not negate the appellant's right to abatement.The Member highlighted a previous Tribunal decision that emphasized the importance of factory closure intimation over technicalities like meter readings. The judgment stressed that the appellant had met all other requirements and that the denial was solely on a technical ground. Ultimately, the appeal was allowed in favor of the appellant, granting them the consequential benefit of the abatement claim.In conclusion, the judgment overturned the denial of abatement based on the failure to intimate electric meter reading, emphasizing the importance of substantive compliance over procedural technicalities. The decision was supported by legal precedents and established principles of law, ensuring that the appellant's rights were upheld despite the procedural lapse.