ORDER
T.K. Jayaraman, Member (T)
1. This is appeal filed against the Order-in-Appeal No. 200/2004 (H-IV) CE dated 30.11.2004 passed by the Commissioner of Customs & Central Excise (Appeals-II), Hyderabad.
2. The facts of the case in brief are as follows :-The appellants are manufacturers of MS Ingots. They filed declaration as per Notification No 24/97-CE NT and had opted to pay duty under Rule 96 ZO(3) of the Central Excise Rules, 1944 read with Section 3A of the Central Excise Act, 1944. The appellants had closed their units from 26.11.99 to 20.12.99 and 23.12.99 to 4.1.2000. They availed abatement of duty for the closure period on their own without sanction of the Commissioner as required under Rule 96 ZO (2) of the Central Excise Rules, 1944. Hence show cause notice was issued to them. The adjudicating officer in his findings h ad observed that the units working under 96 ZO (3) can avail abatement on their own, if a unit is closed for not less than 15 years as per the Board Circular dated 30.8.1997. Therefore, it was held that the abatement availed by the appellants themselves for the closure of unit from 26.11.99 to 20.12.99 for 23 days was held to be in order and for the period from 23.12.99 to 4.1.2000 totaling 13 days it was held that the appellants should have paid full duty and sought abatement afterwards. As the procedure was not complied with, the duty with interest was held to be demandable. Penalty was also imposed for the lapse. The appellants approached the first appellate authority. The appellate authority gave relief by reducing the penalty under Rule 96 ZO (3) (ii) to Rs. 20,000/-. However the demand of duty and interest was upheld. The Commissioner (Appeals) held that the appellants have themselves admitted their lapses in not paying duty. The appellants are aggrieved over the impugned order.
3. Shri Anirudh Nayak, learned Advocate appeared for the appellants and Shri R.V. Ramakrishnappa, learned JDR appeared for t he Revenue.
4. The learned Advocate brought to our notice that there are two closure period namely (i) from 26.11.99 to 20.12.99 for 23 days; and (ii) from 23.12.99 to 4.1.2000 for 13 days. Actually they did not work continuously from 26.11.99 to 4.1.2000 for the reason that after closure of unit on 20.12.99, they did not produce any goods on 21.12.99 and 22.12.99 as repair work was going on. This is evident in view of the fact that the closing stock on 20.12.99 and the opening stock on 23.12.99 are the same. That means, there was no production on 21 & 22.12.99. In vie w of this, he pleaded that there was no gap at all and the benefit as provided in Board Circular dated 30.8.97 should be given to them.
5. The learned JDR strongly opposed the prayer of the appellants. According to the DR there were clearly two closure period and as the appellants had not followed the proper procedure, they are not entitled for the abatement as provided in the rules.
6. We have gone through the rival contentions. The Board’s Circular dated 30.8.97 in para 4 (e) has been given the follow ing clarifications:-
“4. (e). Rule 96ZO has been amended to allow abatement of duty, under Sub-section (3 ) of Section 3A of the Central Excise Act, 1944, for the induction furnace units which remain closed for seven or more days. If an induction furnace unit operating under Section 3A is continuously closed for not less than 15 days, then pre-payment of duty for the closure period is not to be insisted upon provided the unit has fulfilled all the conditions stated in Sub-rule 2 of Rule 96ZO. However, the above claim should be subject to verification by the jurisdictional Assistant Commissioner of Central Excise. If such a closure is for a reasonably long period, periodic verification about the continued clo sure should be done by the jurisdictional Assistant Commissioner of Central Excise.”
Since there was no production on 21 & 22.12.99, practically the factory was closed for the period from 26.11.1999 to 4.1.20 00. As per the Board Circular, if the unit operating under Section 3A is continuously closed for not less than 15 days then pre-paymen t of duty for the closure period should not be insisted upon. In the facts and circumstances of the case, we are convinced that the unit is closed continuously for a period not less than 15 days as the balance of the stock remained at 30 M.T. on 20.12.99, 23.12.99 and 4.1.2000 as per the intimatio n of the unit to the Central Excise authority. We are inclined to give the benef it to the appellants. Hence we set aside the Order-in-Appeal and allow the app eal with consequential relief.