Entire closure required for excise closure relief; continuing manufacturing activity defeats exclusion under Rule 92B(2)(c).

A seasonal khandsari unit could claim exclusion of a closure period under Rule 92B(2)(c) only if the factory remained entirely closed for at least 15 continuous days. On the facts, production had already commenced and substantial manufacturing activity continued, including purchase and crushing of sugarcane and operation of the crystaliser, even though the centrifugal was sealed. The unit was therefore not entirely closed and could not obtain relief from duty liability under the closure proviso. The amendment referred to in Notification No. 240/75 did not change that result, and the duty demand and penalty order were restored.

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Issues: Whether the unit was entitled to exclusion of the alleged closure period and relief from duty liability under Rule 92B(2)(c) of the Central Excise Rules, 1944.

Analysis: Rule 92B treated the commencement of manufacturing operations as the point when the centrifugal started working and required, for the benefit of the closure proviso, that the unit remain entirely closed for a continuous period of not less than 15 days. On the facts found, the factory had already commenced production and, despite sealing of the centrifugal, other activities such as purchase and crushing of sugarcane and operation of the crystaliser continued. The unit was therefore not entirely closed and could not claim the benefit of the closure exclusion. The amendment referred to in Notification No. 240/75 did not alter this result on the facts of the case.

Conclusion: The unit was not entitled to the benefit of Rule 92B(2)(c), and the duty demand and penalty order were restored.

Final Conclusion: The revision succeeded, the appellate order was set aside, and the original excise order was reinstated.

Ratio Decidendi: Where a seasonal khandsari unit continues substantial manufacturing activity, it is not "entirely closed" for the statutory exclusion period and cannot avoid duty liability under the closure proviso.

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