2011 (4) TMI 577 - AT - Central Excise

Tribunal remands abatement claim rejection, emphasizes fair consideration and verification of facts

The Tribunal set aside the rejection of abatement claim under Section 3A of Central Excise Act, 1944, due to incorrect duty calculation by the appellants, ... Compounded levy of duty - Applicability of 96ZO(3) of CE Rules, 1944 on appellants since the capacity of Furnace was more than 3 tonnes. - closer of the factory for more than 15 days on many occasions - Held that:- the issue eligibility of the appellants for abatement in terms of the letter issued in the present appeal are decided afresh. Remand the matter to the original adjudicating authority. Issues:1. Eligibility for abatement of Central Excise duty under Rule 96ZO(3) of Central Excise Rules.2. Treatment of a letter issued by the Joint Commissioner as an order and its finality.Issue 1: The appellants, manufacturers of M.S. Ingots and Billets, opted for lump-sum duty payment under Rule 96ZO(3) of Central Excise Rules despite having a furnace capacity exceeding 3 tonnes, resulting in incorrect duty calculation. The factory faced closures due to power supply issues, leading to proportionate duty payments. The appellant claimed abatement under Section 3A of Central Excise Act, 1944, for the closure periods. However, the authorities rejected the abatement claim, citing non-fulfillment of conditions and exclusion under Rule 96ZO(3). The Commissioner (Appeals) upheld the rejection based on past dismissals and the appellant's choice of Rule 96ZO(3) over Section 3A(4). The Tribunal noted the scheme's change post-1997, allowing abatement without restrictions from 1.9.1997. The rejection was based on a letter from the Joint Commissioner, questioning the fulfillment of conditions.Issue 2: The rejection letter from the Joint Commissioner was contested regarding its status as an order. The Jt. CDR argued that the letter should be treated as an order, citing precedents where letters were considered appealable orders. The Tribunal acknowledged the appellants' attempts to appeal and represent against the letter. Despite the office's refusal to accept the appeal, the Tribunal found fault with the Commissioner (Appeals) for not verifying the situation. The Tribunal emphasized the need for a fair consideration of the representation and the circumstances leading to the appeal's non-acceptance. Ultimately, the Tribunal decided to treat the letter as not a final order, directing a reevaluation of the abatement claim by the original adjudicating authority.In conclusion, the Tribunal set aside the impugned order and remanded the matter for fresh adjudication, emphasizing fair consideration, verification of facts, and proper decision-making regarding the abatement claim and the status of the letter issued by the Joint Commissioner. The appellants were granted a reasonable opportunity to present their case during the reevaluation process.