2013 (11) TMI 749 - HC - Central Excise

Court allows central excise appeal, grants abatement under Compound Levy Scheme despite non-compliance with rules.

The Commissioner of Central Excise Versus M/s Aswad Steels Alloys Pvt. Ltd.

The court condoned the delay in filing the central excise appeal due to valid grounds, allowed the appeal regarding eligibility for abatement under the ... Eligibility to avail abatement – Electricity meter reading for claiming exemption - Alternative method of assessment Compounded levy scheme u/s 3A(4) of central excise act,1944 r.w. sub-Rule 3 of Rule 96ZO of the Central Excise Rules, 1944 –Held that:- Rule 96ZO (3) of the Central Excise Rules provides for an alternative method of assessment - The conditions given in the Rule require the appellant to give electricity meter reading for the purposes of claiming abatement - During inspection it was found that factory was not running at the relevant period - It was not denied that factory did not have electricity connection - No other material was available to have denied the abatement of 15 days claimed by the assessee of which the intimation was given in time. Law does not insist on impossibility for complying with the provisions of the Act for claiming any exemption or abatement - Where it is established that the party did not have electric connection and was using only DG set, the insistence of providing electricity meter reading for abatement of liability was an absurd suggestion - The other circumstances namely that factory was not found running during inspection and that intimation was given in time was sufficient to grant abatement for relevant period – there was no question of law arise for consideration in the appeal – Decided against appellant. Issues:Delay in filing the appeal, eligibility for abatement of duty under Compound Levy Scheme, compliance with Rule 96ZO (2) of Central Excise Rules, alternative method of assessment under Rule 96ZO (3), interpretation of legal provisions for claiming abatement.Delay in filing the appeal:The central excise appeal was filed with a delay of 6 days, attributing the delay to Holi holidays. The delay condonation application supported by an affidavit stated valid grounds for condonation, which were considered good and sufficient by the court. Consequently, the delay in filing the appeal was condoned.Eligibility for abatement of duty under Compound Levy Scheme:The central excise department raised a question of law regarding the eligibility of a manufacturer under the Compound Levy Scheme to avail abatement of duty when using a DG Set without a meter for manufacturing. The Tribunal observed that the factory was not functioning during the relevant period, and the appellant had fulfilled all requirements except providing electricity meter reading, which was deemed a technical ground for rejection. The Tribunal set aside the impugned order, allowing the appeal with consequential relief to the appellant.Compliance with Rule 96ZO (2) of Central Excise Rules:Rule 96ZO (2) requires the appellant to intimate the reading of the electricity meter to the Assistant Commissioner for claiming abatement. However, in this case, it was established that the factory was not running during the relevant period and did not have an electricity connection. The court found the insistence on providing electricity meter reading for abatement of liability to be absurd when the factory was solely using a DG set. The circumstances of the factory not running during inspection and timely intimation were deemed sufficient to grant abatement for the relevant period.Alternative method of assessment under Rule 96ZO (3):Rule 96ZO (3) provides for an alternative method of assessment, with conditions requiring electricity meter reading for claiming abatement. The court emphasized that the law does not demand compliance with provisions that are impossible, such as providing electricity meter reading when the factory operates solely on a DG set. The court concluded that the circumstances, including the factory not running during inspection and timely intimation, warranted granting abatement for the relevant period.Interpretation of legal provisions for claiming abatement:The court determined that no question of law arose for consideration in the central excise appeal, ultimately dismissing the central excise appeal based on the findings and analysis of the case.