Abatement under Central Excise rules cannot be claimed from Section 3A(2) when the concessional scheme under Rule 96ZP(3) is chosen.

Section 3A(2) of the Central Excise Act, 1944 is an enabling rule-making provision and does not itself create a substantive right to abatement of duty. Abatement, where available, flows from Section 3A(3) and the corresponding rules, and a dealer opting for the concessional scheme under Rule 96ZP(3) cannot simultaneously invoke the statutory abatement mechanism under Rule 96ZP. The Tribunal held that the assessee was not entitled to claim abatement for factory closure on the basis of Section 3A(2) and, while rejecting the claim on merits, referred the legal question to a Larger Bench for authoritative determination.

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Issues: Whether an assessee opting for the concessional rate under Rule 96ZP(3) of the Central Excise Rules, 1944 can claim abatement of duty for factory closure by invoking Section 3A(2) of the Central Excise Act, 1944.

Analysis: Section 3A(2) empowers the Central Government to frame rules and does not itself confer a right of abatement. The substantive provision for abatement is found in Section 3A(3), while Rule 96ZP(2) regulates the manner of claiming such abatement. The assessee had chosen the concessional scheme under Rule 96ZP(3), which is inconsistent with availing abatement under the statutory scheme. The earlier view relied upon by the Commissioner (Appeals) was not accepted, and the Tribunal held that the benefit of abatement could not be read into Section 3A(2).

Conclusion: The assessee was not entitled to abatement of duty under Section 3A(2) read with Rule 96ZP while availing Rule 96ZP(3); the view was against the assessee and in favour of the Revenue.

Final Conclusion: The Tribunal rejected the assessee's entitlement to abatement on merits and referred the legal question to a Larger Bench for authoritative determination.

Ratio Decidendi: Section 3A(2) is an enabling provision for rule-making and cannot, by itself, operate as a substantive source of abatement of duty; abatement, where available, must flow from the specific abatement provision of Section 3A(3) and the corresponding rules.

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