Capacity-based duty abatement for factory closure cannot be denied where working-period duty and interest were already paid.

An appeal challenging a duty-demand order was treated as maintainable because the impugned communication was a merits-based determination of liability, not a mere administrative intimation. In a capacity-based monthly duty regime, closure of the factory for part of the month did not justify denial of abatement or imposition of additional duty for the closed period where duty had already been paid for the actual working days. Any delay-related consequence was confined to interest, and once interest was discharged, no further duty demand survived for the period of closure.

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Issues: (i) Whether the appeal against the order directing payment of duty was maintainable before the Tribunal. (ii) Whether the appellant was liable to pay duty for the period during which the factory remained closed, when duty for the working period had already been paid and interest had been discharged.

Issue (i): Whether the appeal against the order directing payment of duty was maintainable before the Tribunal.

Analysis: The order impugned was not a mere administrative communication but a decision on merits directing payment of duty after consideration of the representation. On that basis, and following the governing principle that an order determining liability is appealable before the Tribunal, the objection to maintainability was rejected.

Conclusion: The appeal was held to be maintainable before the Tribunal.

Issue (ii): Whether the appellant was liable to pay duty for the period during which the factory remained closed, when duty for the working period had already been paid and interest had been discharged.

Analysis: Under the capacity-based duty scheme, the monthly duty is ordinarily payable by the 5th of the month, but where the unit is closed for a period and the manufacturer has already paid duty for the actual working days, the substantive benefit of abatement cannot be denied merely for non-compliance with the timing of payment. The earlier decision relied upon held that such non-compliance may justify interest, but not denial of the underlying abatement benefit. Since the factory was closed for the relevant period and interest had already been paid, no further duty demand was sustainable for the closed period.

Conclusion: The appellant was not required to pay the demanded duty for the period of closure.

Final Conclusion: The duty demand was set aside and the appellant obtained relief on merits, with the Tribunal recognising the maintainability of the appeal and the availability of abatement for the closed period.

Ratio Decidendi: In a capacity-based monthly duty regime, closure of the factory for a part of the month does not justify denial of abatement or additional duty demand for the closed period where the manufacturer has paid duty for the actual working period and interest, if any, is otherwise payable.

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