Abatement for factory closure under packing machine duty rules applies to actual operating days, not full monthly prepayment.

Abatement for continuous factory closure under the packing machine duty rules was held to depend on actual machine operation, not on prior payment of duty for the entire month. The Tribunal applied the principle that duty liability is confined to the period of operation, so the assessee could claim abatement without first depositing full monthly duty. On that basis, the departmental demand built on the contrary method was not sustainable. Duty demands and penalties were set aside, while interest was upheld only to the extent arising from delay in paying the adjusted duty from the due date until payment.

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Issues: Whether, for claiming abatement during factory closure under the packing machine duty rules, the assessee was required to first pay duty for the entire month and thereafter claim abatement, and whether duty demand, penalty and interest could be sustained on the basis adopted by the Department.

Analysis: The assessee was entitled to abatement for the period of continuous closure. The controlling principle applied was that the duty payable had to be confined to the period during which the machines actually operated, and prior deposit of duty for the whole month was not a prerequisite for claiming abatement. The Tribunal followed the earlier decisions holding that only the adjusted duty for the operating days was payable, while interest would arise only for delay in payment of that adjusted duty from the due date till payment. In view of that settled position, the demand raised on the footing that full monthly duty had to be paid first was not sustainable.

Conclusion: The duty demands and penalties were set aside, and liability was sustained only to the limited extent of interest on delayed payment of the adjusted duty.

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