Declared lock-out is not closure where production and clearances continue, preserving entitlement to incentive rebate.

For incentive rebate under Notification No. 283/82, a factory is treated as "closed" only where there is actual cessation of production and excisable clearances. A declared lock-out, without corresponding stoppage of manufacturing activity, does not by itself satisfy the closure condition. On the facts, production of motor vehicle parts and some vehicles continued during the relevant period, with clearances also made, so the factory was not regarded as closed for notification purposes. The interpretation adopted in earlier Tribunal decisions was followed, and ambiguity in the exemption provision was resolved in favour of the taxpayer. The assessee therefore remained entitled to the incentive rebate.

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Issues: Whether a factory could be treated as "closed" for the purpose of incentive rebate under Notification No. 283/82 when a lock-out was declared but production and clearances continued during the relevant base period.

Analysis: The relevant notification drew a distinction between a factory that had not remained closed for more than 15 days at one time and one that had so remained closed. On the facts, the records showed continued production of motor vehicle parts and some vehicles, with excisable clearances during the period of lock-out. The term "closed" was therefore not satisfied merely because a lock-out was declared. The interpretation adopted by earlier Tribunal decisions was followed, and the principle that ambiguity in an exemption provision must be resolved in favour of the taxpayer was applied.

Conclusion: The factory was not treated as closed within the meaning of the notification, and the assessee remained entitled to the incentive rebate.

Final Conclusion: The Revenue's challenge failed because the declared lock-out did not, by itself, disqualify the assessee from the rebate where production and clearances continued.

Ratio Decidendi: For the purpose of an incentive notification, "closed" denotes actual cessation of production and clearances, and a declared lock-out does not amount to closure where manufacturing activity continues.

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