Judgment:
1. The issue involved in this appeal filed by M/s. Ram Shree Steels (P) Ltd. is regarding the abatement of duty under Section 3A(3) of the Central Excise Act read with Rule 96ZO(2) of the Central Excise Rules.
2.1. Shri Bipin Garg, learned Advocate, submitted that the Appellants manufacture M.S. Ingots which are notified under Section 3A of the Central Excise Act; that they had claimed abatement of duty for the period 28-5-1998 to 29-8-1998 inasmuch as the entire factory had remained closed; that the officers of Electricity Board had filed First Information Report against ten units, including the Appellant's unit; that the Electricity Board had disconnected their electricity supply and sealed the electric meter; that the intimation for closure of factory had been given by them on 28-5-98; that the meter reading was not available as the meter room was sealed by the Officers of Electricity Board; that they had not claimed the abatement of duty with effect from 27-5-1998 as they had filed the intimation on 28-5-1998; that it is a settled position that the abatement has to be allowed by the Department from the date of filing the closure intimation. The learned Advocate mentioned that in a similar situation, the Commissioner, Central Excise Kanpur in the matter of M/s. Raj Ratan Castings (P) Ltd. vide Adjudication Order No. 08/Commr/Tech/2001, dated 12-12-2001 has allowed the abatement observing that "the reading of the electricity meter had not been given when the production was stopped in the factory .... It is evident from records that the party vide intimation dated 27-5-98 had shown their inability to supply the last meter reading due to inaccessibility to the electric meter room as the same is sealed by the Electricity Department.... it is a vital proof of disconnection of electricity for past period. In my opinion any dispute for the past period with the Electricity Department does not negate the fact that the electricity of the unit was disconnected during the intimated period." The ld. Advocate, further, submitted that a new meter was installed in their factory on 29-8-98 which is evident from the Sealing Certificate dated 29-8-98 given by the Electricity Board; that they had filed an intimation of restarting of the unit on 1-9-1998 though the production was started on 30-8-98; that they are thus claiming the abatement only up to 29-8-98 and not up to 30-8-98; that as new meter was installed, meter reading was not given; that the new meter was installed as a theft of their electric meter had taken place for which they had filed FIR in Police Station on 23-6-98. The learned Advocate also mentioned that the Adjudicating Authority had given his findings that the intimation regarding opening balance of finished stock as on 30-8-98 was received in the Commissionerate on 29-10-99; that this finding is not correct on fact as their said letter was received by the Office of Deputy Commissioner on 29-10-1998 which is evident from the receipt stamp on the letter on which date was wrongly typed as '28-10-99'. He, thus, submitted that the Appellants have followed proper procedure; that Rules of procedure are made to further justice and not to hamper it; that in the case of Mangalore Chemicals & Fertilizers Ltd. v. Dy. Commissioner [1991 (55) E.L.T. 437 (S.C.)], it has been held by the Supreme Court that Non observance of a procedural condition of a technical nature was condonable while non observance of substantive condition is not condonable; that the procedure prescribed in Rule 96ZO(2) is directory/technical in nature and substantial compliance of directory procedure has been held to be acceptable.
2.2 The learned Advocate, relied upon the decision in the case of Kirpal Steels (P) Ltd. v. CCE [2001 (133) E.L.T. 198 (T)], wherein the Tribunal accepted the explanation of the assessee that intimation of closure could not be given due to unavailability of Certificate from Electricity Board about damage of electric meter and held that there was no ground for rejection of abatement claims. Reliance was also placed on the decision in the case of UP Alloys (P) Ltd. v. CCE, Kanpur [1999 (113) E.L.T. 495 (T) = 1999 (34) RLT 324]; and Good Earth Steel (P) Ltd. v. CCE, Kanpur I,Aishwarya Ispat (P) Ltd. v. CCE, Kanpur, [2000 (120) E.L.T. 730 (T) = 2000 (40) RLT 987] wherein it was held that "substantial benefit could not be denied for procedural lapses, if any". In this case the Tribunal allowed the abatement of duty though stock position was not given at the time of intimation but it was submitted on the later date. He also referred to the decision in the case of Shivansi Ferrous (P) Ltd. v. CCE, Kanpur [2001 (127) E.L.T. 413 (T)].
3. The learned Advocate, further, mentioned that the appellants initially had two furnaces installed in their factory; that on 29-6-98 they applied to the Department for permission for reduction of capacity of production of one furnace from 4 MT to 3 MT since it was not giving satisfactory production; that the permission of the Commissioner to change the installed capacity was intimated to them under letter dated 5-8-98; that regarding the change in the capacity was duly informed by them on 28-8-98 and they filed revised declaration for fixing the revised capacity and duty liability; that further they had intimated to the Department, in their letter dated 2-9-98 that they were surrendering their second furnace of 4 MT and the same was dismantled by them on 2-9-98; that by mistake they filed an abatement claim for the period from 30-8-1998 to 31-3-1999; that, however, under their letter dated 5-1-2000 they wrote to the Department that they were eligible to the benefit of Rule 4 of the Induction Furnace Annual Capacity Determination Rules, 1997; that officers visited their factory on 26-11-98 and had noticed that only one furnace was installed; that they had verified the parameters; that the Commissioner has not given any findings in the impugned order in this regard.
4. Countering the arguments, Shri Jagdish Singh, learned DR, submitted that as far as the issue regarding removal of second furnace is concerned, it is not part of the present proceedings as the show cause notice was only issued for denying the abatement of duty sought by the Appellants; that the Commissioner has observed in the impugned order that the Appellants had stated in their reply that the abatement claim for the period 30-8-98 to 31-3-99 had been filed under bona fide mistake of law; that the Commissioner had also observed that "any claim of the party for any benefit under Section 3A(4) or under Rule 4 of Induction Furnace Annual Capacity Rules, 1997 does (not) merit discussion as they are beyond the purview of the instant show cause notice." The learned DR, further, submitted that the conditions set out in Rule 96ZO(2) and Kanpur Commissionerate Trade Notice No. 121/97, dated 7-10-97 for getting abatement of duty are mandatory and not of procedural importance since the Rule 96ZO(2) is specific inasmuch as "the abatement will be allowed .... Subject to the fulfilment of following condition; that as per decision in Indal v. Thane Municipal Corporation [1991 (55) E.L.T. 454 (S.C.)], non observance of even a procedural condition cannot be condoned if likely to facilitate commission of fraud and introduce administrative inconveniences; that letter of closure dated 27-5-98 was received by the Asstt. Commissioner on 28-5-98, whereas they were required to intimate about closure either on 27-5-98 or prior to that date; that they had also not furnished the electricity meter reading and as such they did not comply with the conditions (a) and (b) of Rule 96ZO(2); that moreover the intimation of restarting of production was received in the Divisional and Range office on 1-9-98 and as such the Appellants did not comply with the conditions (c) and (d) of Rule 96ZO(2) read with Trade Notice No.121/97 inasmuch as they did not inform the jurisdictional Range Office in time about the closure/restart of their factory; that in absence of intimation regarding actual date of restart of production, there was no way left for the Department to ascertain the correct date which may be considered as the date of start of production. The learned DR relied upon the decision in the case of Indian Aluminium Company Ltd. v. Thane Municipal Corporation [1991 (55) E.L.T. 454 (S.C.) wherein the Apex Court held that as the Company failed to file declaration, there was no opportunity for the authorities to verify the use of the material and Company had thus failed to fulfil an important obligation under the law though procedural. The learned DR also mentioned that the plea of theft of electric meter is not acceptable as on one side they are contesting that due to sealing of meter room, electricity meter reading could not be provided and on the other hand they are saying that the meter was stolen on 13-6-98; that when the meter can be stolen, it is likely that the meter can be disconnected and factory can be run on pilfered electricity; that it is clear from the sealing certificate that there is a warning regarding the condition of the meter seal. He finally submitted that the decisions relied upon are not applicable as in most of those cases electronic meters were installed.
5. We have considered the submissions of both the sides. Proviso to Section 3A(3) of the Central Excise Act provides that where a factory did not produce the goods during any continuous period of not less than 7 days, duty calculated on a proportionate basis shall be abated in respect of such period if the manufacture of such goods fulfils conditions as may be prescribed. The conditions have been specified in Rule 96ZO(2) of the Central Excise Rules. According to these conditions, the manufacturer has to inform in writing about the closure to the Assistant Commissioner with a copy to the Superintendent either prior to the date of closure or on the date of closure along with reading of electricity meter and the closing balance of the stock of the ingots and billets of non-alloy steel. Further, the manufacturer has to inform in writing about the starting of production along with meter reading and closing balance of stock. In the present matter it is not in dispute that the Appellants had sent intimation about the closure of factory on 28-5-98 along with closing balance of stock. The Appellants have claimed the abatement of duty only from 28-5-98 and not for any earlier period and as such the condition specified in Rule 96ZO(2) of the Rules of informing in writing about the closure on or before the date of closure stands complied with. There is no allegation nor there is any finding that the closing stock position was not intimated by the Appellants. Regarding non-intimating the reading of electricity meter, the Appellants had submitted that the Meter room was sealed by the Electricity Board which made it impossible for them to furnish meter reading. We find force in the submissions made by the Appellants. Once the meter room has been sealed, the Appellants have been barred from entering the room and reading the electric meter. We also find that the Commissioner, Central Excise, Kanpur in a subsequent case of Raj Rattan Castings (P) Ltd. had allowed the abatement of duty accepting the contention of the said manufacturer that the electricity meter reading could not be given due to inaccessibility to the electric meter room as the same was sealed by the electricity department. The appellants have submitted that a new electric meter was instilled in their factory on 29-8-98 which is apparent from the certificate given by UP Electricity Board as their earlier meter was stolen for which a FIR had been filed by them. The Revenue had not brought any evidence to controvert these factual submissions. The adjudication authority has discarded the Certificate of Electricity Department by merely observing that the said department is not the prescribed authority for such purpose. We do not agree with these observations. The electric meter can be installed only by the Electricity Board and any Certificate given by that authority cannot be just brushed aside. It is also seen from the photocopy of the appellant's letter that the intimation regarding restart of factory was received in the office of the Deputy Commissioner on 29-10-1998. They have also submitted that by mistake the date was typed as 28-10-99, which appears to be correct in view of the letter being received by the Deputy Commissioner's Office on 29-10-1998. The appellants are claiming the abatement only up to 29-8-98, the day on which the new meter was installed. In view of these facts and circumstances we feel that the appellants have substantially complied with the conditions specified under Rule 96ZO(2) of the Central Excise Rules. Consequently, they would be eligible for abatement of duty for the period from 28-5-1998 to 29-8-1998. As far as the abatement for the period 30-8-98 to 31-3-99 is concerned, we find that-the appellants have themselves claimed that the abatement claim was filed under bona fide mistake of law. Accordingly, the Commissioner was justified in not considering the abatement claim. The appellants for any other relief may approach the Department if they like and permissible under the law.