Compounded levy abatement: 15 days' continuous factory closure can span two months, and payment timing cannot defeat relief.

Under the compounded levy abatement scheme, entitlement depends on continuous factory closure for the prescribed 15-day period, and that closure need not fall within a single calendar month. Denial of abatement solely because the closure period straddled two months was unjustified. Prior payment of duty for the entire month was not an inflexible precondition where intended closure was known in advance; at most, any departure from the usual payment sequence could support interest, not defeat the substantive right to abatement when closure was otherwise established. The demand was set aside and abatement granted with consequential relief.

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Issues: (i) Whether a continuous closure of the factory for 15 days was required to fall within the same calendar month for grant of abatement under the compounded levy rules; (ii) whether prior payment of duty for the full month was a mandatory precondition for claiming abatement where the unit knew in advance that it would remain closed.

Issue (i): Whether a continuous closure of the factory for 15 days was required to fall within the same calendar month for grant of abatement under the compounded levy rules.

Analysis: The entitlement to abatement turned on whether the unit had remained closed for a continuous period of at least 15 days. The period of closure need not be confined to a single calendar month. Once the statutory condition of continuous closure is met, denial of abatement merely because the period straddles two months is not justified.

Conclusion: The requirement of 15 days' continuous closure is not restricted to the same calendar month, and abatement could not be denied on that ground.

Issue (ii): Whether prior payment of duty for the full month was a mandatory precondition for claiming abatement where the unit knew in advance that it would remain closed.

Analysis: Where the assessee was already aware of the intended closure, insistence on first depositing duty for the entire month and then seeking refund would be an empty formality. Such non-compliance with the usual sequence may justify levy of interest, but it does not take away the substantive right to abatement when the closure is admitted and the statutory conditions are otherwise satisfied.

Conclusion: Prior payment of duty for the whole month was not an inflexible precondition in the facts of the case, and denial of abatement was unjustified.

Final Conclusion: The impugned demand was set aside and the assessee was granted abatement with consequential relief, while the interest already paid was not disputed.

Ratio Decidendi: Under the compounded levy abatement scheme, continuous closure of the factory for the prescribed period is sufficient even if it spans two calendar months, and a procedural lapse in the timing of duty payment cannot defeat the substantive right to abatement where closure is established.

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