Full Judgment
2. The facts are not much in dispute. The respondents applied for abatement of duty for the period 18-2-2000 to 28-2-2000 on the ground that their stenter remained closed for this period. They, however, did not make deposit of the duty for the entire month of Feb. 2000 in terms of Sub-rule (3) of Rule 96ZQ of the Rules, at the time of filing of abatement claim. They however, later during the pendency of the rebate claim made deposit of the entire duty in instalment as detailed in the order itself. The Commissioner has allowed abatement claim but directed the respondents to pay mandatory penalty equal to the duty and also interest in terms of Rule 96ZQ(5) of the Rules.
3. The Revenue has challenged only part of the impugned order of the Commissioner relating to the abatement claim of the respondents.
According to them, as alleged in the grounds of appeal, abatement claim of the respondents should not had been allowed for two reasons.
Firstly, that the entire factory did not remain closed during the period in question. Secondly, no pre-deposit of duty for the entire month of Feb. 2000 was made as required by Rule 96ZQ(7)(e) of the Rules. These very grounds have been reiterated by the learned DR during the course of arguments.
4. On the other hand, the learned counsel has contended that abatement of duty can be claimed as per provisions of Rule 96ZQ(7)(a) in respect of a single stenter which had remained close for a particular period not less than one month. The entire factory is not required to had remained close for claiming abatement, under the said rule. He has further contended that Rule 96ZQ nowhere mandates pre-deposit of entire duty amount for a full one month where the abatement claim is for less than a month, before lodging abatement claim. According to him, even the Commissioner is required to grant an opportunity to an assessee for making deposit of the duty before deciding the abatement claim. The counsel has also referred, in this regard, the ratio of law laid down in Mahalakshmi Enterprises v. CCE, New Delhi 6. So far as the first ground of the Revenue that entire factory should have remained close for claiming abatement of duty for the period in question by the respondents, the same is wholly mis-conceived. This ground was not even alleged in the show cause notice. The Revenue cannot be permitted to trave beyond the scope of show cause notice and allowed to put up altogether a new ground for resisting the abatement claim of the respondents. Even otherwise, from the bare perusal of Rule 96ZQ, no such requirement can be spelled out. Rather the perusal of this rule shows that the abatement can be claimed in respect of a single stenter by an independent processor if the stenter had remained close for a continuous period not less than seven days.
7. In the instant case, it remains undisputed that stenter of the respondents who are independent processors remained closed for 10 days i.e. from 18-2-2000 to 28-2-2000. Therefore, they were entitled to claim abatement for this period under Rule 96ZQ.8. This takes me to the second ground put forth by the Revenue. From the reading of Rule 96ZQ, it cannot be said that deposit of duty for the entire month of Feb. 2000 was a condition precedent for lodging the claim, for the disputed period, by the respondents. Regarding deposit of duty, Clause (e) of Rule 96ZQ(7) only enacts that when the claim for abatement by the independent processor is for a period less than one month, he shall be required to pay duty, as applicable, for the entire period of one month and may subsequently seek such claim after payment of such duty. This is the only clause which had been relied upon by the Revenue, in this appeal for challenging the validity of the impugned order. But this clause nowhere requires that this deposit has to be made before or at the time of lodging the abatement claim. It only puts an obligation on the independent processor to deposit duty for full one month where claim for abatement had been lodged by him for a period less than one month. In the instant case, no doubt, the respondents did not make deposit of the duty for the entire period of Feb. 2000 before filing of the abatement claim but at the same time, they had deposited the entire duty during the pendency of the abatement claim. Even otherwise, the Commissioner was required to afford an opportunity to the respondents for depositing the duty before disposing of their abatement claim, as per the law laid down in Mahalakshmi Enterprises (supra).
9. Therefore, it is difficult to hold that there had been any violation of the provisions of Rule 96ZQ of the Rules, by the respondents while claiming the abatement of duty for the period in question. The Commissioner, by taking into consideration the deposit of duty for the entire month of Feb. 2000, had rightly allowed the abatement claim of the respondents for the disputed period. The Commissioner has even burdened them with penalty equal to duty amount and interest at the rate of 36% in terms of Rule 96ZQ(5). This part of the order has been even accepted by the respondents for having not challenged the same by way of cross-objections in the present appeal. The Revenue has also not challenged this part of the impugned order.
10. In view of the discussions made above, I do not find any legal infirmity or illegality in the impugned order of the Commissioner and the same is upheld. The appeal of the Revenue is, accordingly, dismissed being without any merit.