Full Judgment
2. Shri J.S. Agarwal, learned Advocate, submitted that the Appellants manufacture M.S. Ingots which were chargeable to Central Excise duty under Section 3A of the Central Excise Act; that they had entered into a contract with the Government of Goa for uninterrupted power supply; that however, the State Government informed that the use of power would be restricted from 1st to 10th of every month; that on approaching the High Court the State Government was directed to restore the supply power as per the contract; that, however, the normal power supply was never restored and the same remained erratic; that consequently they were compelled to stop production and could manufacture Ingots only whenever there was power available; that they applied for abatement of duty; that the Commissioner under the impugned order has confirmed the demand of duty and imposed penalty besides demanding interest on the ground that as they had opted for payment of Central Excise duty under Rule 96ZO(3) of the Central Excise Rules/1944, the question of abatement being allowed does not arise; that the Commissioner has also relied upon the decision of the Supreme Court in the case of CCE v.Venus Casting Pvt. Ltd., 2000 (69) ECC 1 (SC) : 2000 (117) ELT 273 (SC) and UOI v. Supreme Steel and General Mills, 2001 (78) ECC 225 (SC); 2001 (133) ELT 513 (SC) wherein it has been held that a hybrid procedure under Rule 96ZO(3) in combination that the facility under Sub-section (4) of Section 3A cannot be availed of. The learned Advocate submitted that Rule 96ZO(3) does not debar any manufacturer to avail of the abatement of duty, if his factory remained closed for not less than 7 days continuously; that the Appellate Tribunal has held in the case of Malviya Steels Ltd. v. CCE, Jaipur, 2002 (49) RLT 41S (Cegat) that "the lower appellate authority has also not referred to any provisions which has led him to observe that the benefit of closure in a particular year will accrue to an assessee for fixing the ACP for the succeeding year..........Hon'ble Supreme Court in their judgment have observed that once an assessee exercised his option of paying duty under Rule 96ZO(3), he cannot go back to the provisions of Section 3A(4) which provides payment of duty on actual capacity of production..........; that the benefit of abatement from payment of duty for the period of closure of the mill is available to the Appellants". Reliance has also been placed on the decision in the case of (CEGAT) and Jindal Electro Casting P. Ltd. v. CCE, New Delhi, Final Order No.A/438/03-NBC dated 27.8.03. Reliance has also been placed on the Ministry's Circular No. 331 /47/97-CX dated 30.8.97.
3. Countering the arguments Shri V. Valte, learned SDK, reiterated the findings as contained in the impugned Order.
4.1 We have considered the submissions of both the sides. Rule 96ZO(3) at the relevant time reads as under:- "Notwithstanding anything contained elsewhere in these Rules,.........he may,........pay a sum of Rs. five lakhs per month in two equal instalments.......and the amount so paid shall be deemed to be full and final discharge of his duty liability......Subject to the condition that the manufacturer shall not avail of the benefit, if any, under Sub-section (4) of Section 3A of the Central Excise Act, 1944." Thus this is apparent that Rule 96ZO(3) does not debar eligibility of such a manufacturer to the benefit of the provisions of Section 3A(3) of the Act which reads as under: "Provided that, where a factory producing notified goods did not produce notified goods during any continuous period of not less than seven days duty calculated on a proportionate basis shall be abated in respect of such period, if the manufacturer of such goods fulfills such conditions as may be prescribed." 4.2 It was clarified by the Ministry in Circular No. 331/47/97-CX dated 30.8.97 that Rule 96ZO has been amended to allow Central Excise Act for the Induction Furnace unit which remained close for 7 days or more. It is thus apparent that there is no restriction under Rule 96ZO on allowing abatement of duty. This was the view expressed by the Tribunal in the case of Simran Metals Ltd. and Jindal Electro Casting P. Ltd. In absence of any qualifying clause about non-availability of abatement to the manufacturer opting to discharge duty under Rule 96ZO(3) the impugned Order is set aside and the matter is remanded to the Commissioner for considering the abatement claim filed by the appellants. The appeal is, thus allowed by way of remand.