Duty abatement for factory closure requires timely intimation and at least seven days of continuous shutdown under central excise rules.

Proportionate abatement of duty was available where a factory remained closed for a continuous period of at least seven days, provided the prescribed intimation requirements were met. Section 3A of the Central Excise Act and Rule 96ZO(2) required written notice of closure to the Assistant Commissioner, with a copy to the Superintendent, along with the electricity meter reading and stock particulars, and a similar intimation on resumption of production. On the stated facts, the assessee gave notice on the date of closure and again on reopening, the communications bore the Assistant Commissioner's office stamp, and the closure lasted more than seven days. The assessee was therefore entitled to abatement of duty for the closure period.

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Issues: Whether the assessee was entitled to abatement of duty for the period during which the factory remained closed, in terms of Section 3A of the Central Excise Act and Rule 96ZO(2) of the Central Excise Rules.

Analysis: The proviso to Section 3A(3) permits abatement on a proportionate basis where production does not take place for a continuous period of not less than seven days, subject to compliance with the prescribed conditions. Rule 96ZO(2) requires written intimation of closure to the Assistant Commissioner, with a copy to the Superintendent, either before or on the date of closure, together with the electricity meter reading and stock particulars, and a similar intimation when production recommences. The record showed that the assessee informed the department on the date of closure and on the date of resumption, and both communications bore the office stamp of the Assistant Commissioner. The factory also remained closed for more than seven days.

Conclusion: The assessee had complied with the prescribed conditions and was entitled to abatement of duty for the closure period from 14-4-1998 to 23-4-1998.

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