Compounded levy abatement turns on timely closure intimation; relief begins from valid notice date, not the closure date.

Under the compounded levy scheme governed by Section 3A of the Central Excise Act and Rule 96ZO(2)(a), abatement depends on prior or same-day written intimation of closure and continuous closure for at least seven days. Where the intimation was filed one day after closure began, abatement was not available from the actual closure date but was available from the date of intimation. The date of restart was excluded from the eligible period. The same principle applied to the second closure period, and the seven-day continuous closure condition was satisfied on the facts. The disallowance was therefore set aside to the extent abatement was wrongly denied.

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Issues: Whether the assessee was entitled to abatement of duty under the compounded levy scheme for the periods of closure of the induction furnace unit, in view of the timing of intimation under Rule 96ZO(2)(a) and the requirement of continuous closure of not less than seven days.

Analysis: Section 3A of the Central Excise Act, 1944 governed duty under the compounded levy scheme, while Rule 96ZO(2)(a) of the Central Excise Rules, 1944 required written intimation of closure to be given prior to the date of closure or on the date of closure. The first intimation was filed one day after closure began, so abatement was not available from the actual date of closure, but was available from the date of intimation. The date of restart was excluded from the claim. On the second closure period, the same principle applied, and the intimation date controlled the commencement of abatement. The statutory condition of continuous closure for not less than seven days was satisfied on the facts, and the rule did not justify denial of abatement merely because the claimed period was reduced to exclude the date of closure or restart.

Conclusion: The assessee was entitled to abatement for the eligible closure periods, subject to exclusion of the dates not covered by valid intimation, and the disallowance was set aside to that extent.

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