Hari Leela Process House Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....to be payable by it as determined under the hot air stenter independent textile processor annual capacity determination rules, 2000 by the fact that during the period under consideration only one stenter was non-functioning. the joint commissioner held the abatement not permissible as sub-rule (7) of rule 96 zq required that during the period for which the abatement is claimed the processor should not produce or manufacture any goods.the commissioner (appeals) has dismissed the appeal in that order for failure to deposit entire duty failing due as a result of its order the penalty imposed on the assessee for not paying the duty.2. we are concerned with the period between 1^st march 2000 and 1^st april 2000. sub-rule (7) of rule 96zq as it stood on these dates refers to a case where processor "does produce or manufacture the process fabrics specified in sub-rule (1) during any continuous period of not less than seven days which has been claimed abatement... prior to 1^st march clause (a) of the sub-rule provides that abatement shall only be applicable under closure of the hot air stenter containing the chambers and not in case of closure of any one or more chambers.....

Judgment:

1. The question that arises int he appeal is whether the applicant is disentitled to abatement of the duty determined to be payable by it as determined under the Hot Air Stenter Independent Textile Processor Annual Capacity Determination Rules, 2000 by the fact that during the period under consideration only one stenter was non-functioning. The Joint Commissioner held the abatement not permissible as Sub-rule (7) of Rule 96 ZQ required that during the period for which the abatement is claimed the processor should not produce or manufacture any goods.

The Commissioner (Appeals) has dismissed the appeal in that order for failure to deposit entire duty failing due as a result of its order the penalty imposed on the assessee for not paying the duty.

2. We are concerned with the period between 1^st March 2000 and 1^st April 2000. Sub-rule (7) of Rule 96ZQ as it stood on these dates refers to a case where processor "does produce or manufacture the process fabrics specified in Sub-rule (1) during any continuous period of not less than seven days which has been claimed abatement... Prior to 1^st March Clause (a) of the sub-rule provides that abatement shall only be applicable under closure of the hot air stenter containing the chambers and not in case of closure of any one or more chambers contained in such stenter. On 1.3.2000, this sub-rule was amended and provided that abatement shall be applicable only on complete closure of the factory and not closure of hot air stenter. By the further amendment made on 1.4.2000, the position as it stood prior to 1.3.2000 was restored. We find some force in the contention of the applicant that except for a short period of a month the Sub-clause (a) provide that abatement would be available if the stenter is completely closed and that if it is contended that the factory itself must not be functioning this rule would become meaningless and redundant. Counsel for the applicant also cites a decision of the Tribunal in Shakti Prints v. CCE appeal 2729 & 2872/00 to which the matter has been remanded to the Commissioner to consider this point.

3. Accordingly, we take up the appeal itself and order that on the applicant depositing Rs. 2 lakhs within a month from the receipt of this order, the Commissioner (Appeals)'s order is set aside and the matter remanded for disposing of the appeal on this point. In the event of failure to deposit this amount, the appeal before us stands dismissed.