Temporary cessation of work can attract duty adjustment under Notification No. 17/2007-CE when procedural requirements are met.

Paragraph 8 of Notification No. 17/2007-CE applies to a factory that temporarily ceases work, not only to permanent closure, because the provision read with paragraph 3 allows reversion to the normal duty procedure where the prescribed process is followed. The explanation merely excludes cessations for one or two shifts and does not bar abatement in other cases of temporary stoppage. On that reading, duty adjustment is available and a demand contrary to that interpretation is unsustainable. The Revenue's relied-upon authority was distinguished on facts, while another view was treated as not stating the correct interpretation of the notification.

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Issues: Whether temporary cessation of work in the factory entitled the manufacturer to the benefit of paragraph 8 of Notification No. 17/2007-CE dated 01.03.2007 and consequential adjustment of duty.

Analysis: Paragraph 3 of the notification provides for payment of a fixed monthly sum with discharge of duty liability on the basis of the prescribed machinery strength, while paragraph 8 specifically deals with factories ceasing to work or reverting to the normal procedure. The text of paragraph 8 does not confine its application to permanent closure, and the explanation only excludes a case where the factory ceases to work for one or two shifts. Read together, paragraphs 3 and 8 permit adjustment of duty where there is a temporary cessation of work, provided the prescribed procedure is followed. The contrary view that no abatement is available was found inconsistent with the notification. The decision relied upon by the Revenue was distinguished on facts, and the other decision was treated as not laying down the correct view.

Conclusion: Temporary cessation of work falls within paragraph 8 of the notification, and the assessee was entitled to the benefit of duty adjustment. The demand was unsustainable.

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