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Issues: Whether the appellant was entitled to abatement of duty for the periods during which the packing machine remained closed for the prescribed minimum period and whether the department could insist on prior payment of duty for the closure period before granting such abatement.
Analysis: The liability to pay duty under the compounded levy scheme was governed by the monthly payment mechanism, but the scheme also expressly provided abatement where the machine remained closed for the required period. The closure of the machine for more than 15 days in each relevant month and compliance with the prescribed sealing and de-sealing procedure were not in dispute. In such a situation, the duty for the non-working period was not payable, and the demand could not survive merely because the appellant had not first paid duty and then claimed refund or abatement. The order relied on the settled view that abatement is a substantive benefit and cannot be denied on a purely procedural objection, particularly where the matter is revenue neutral.
Conclusion: The appellant was entitled to abatement and the demand for differential duty was not sustainable.
Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief.
Ratio Decidendi: Where the statutory conditions for abatement under a compounded levy scheme are satisfied, the revenue cannot insist on prior payment of duty for the closed period as a precondition to grant of abatement, and a substantive abatement benefit cannot be denied on procedural grounds.
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