ORDER
V.K. Agrawal, Member (T)
1. In this appeal M/s. Amar Alloys (Pvt.) Limited are challenging the demand of duty and imposition of penalty against them by the Commissioner, under the impugned order.
2. Shri K.K. Anand, learned Advocate, submitted that the Appellants manufacture non-alloy steel ingots which attracted payment of Central Excise duty on monthly basis under the compounded levy scheme in terms of Section 3A of the Central Excise Act and Rule 96ZO of the Central Excise Rules; that Sub-rule (2) of Rule 96ZO provided for grant of abatement of duty where factory premises remained closed continuously for a period not less than seven days subject to the condition specified therein. The learned Advocate, further, submitted that the Commissioner, under the impugned order, has confirmed the demand of duty and imposed penalty without allowing abatement for the period the factory had remained closed; that the amount of duty cannot be confirmed without allowing the abatement which is permissible under the law; that they had filed the intimation for closure and recommencing of the factory along with the meter readings; that the basic intention in law is that the intimation should be given for the period of closure of the factory; no duty is payable by them as the entire duty pertains to the period the factory remained closed. Finally, he submitted that as no duty was payable by them there is no question of payment of any interest and penalty.
3. Countering the arguments, Shri Jagdish Singh, learned JDR, submitted that under the provisions of law the appellants are first to discharge the duty liability under Rule 96ZO read with Section 3A of the Central Excise Act; that if the factory remains closed the Appellants have to make an application to the Commissioner for claiming abatement from payment of duty; that the law does not permit them to pay duty after taking the abatement on their own; that in view of this, the demand of duty and imposition of penalty is justified.
4. We have considered the submissions of both sides. Central Excise duty is paid before the excisable goods are removed from the factory premises where they are manufactured. In respect of the goods leviable to duty under Section 3A of the Central Excise Act, Rule 96ZO of the Central Excise Rules, 1944 provides for payment of duty in two instalments i.e. 15th of each month and by the last day of the each month. No doubt Sub-rule (2) of Rule 96ZO provided for abatement of duty, if the factory remains closed for continuous period of not less than seven days abatement under rule has to be allowed by an order passed by the Commissioner of Central Excise. It, therefore, flows from the provisions of law that the Appellants have to file an application for claiming abatement with the Commissioner who after considering their application will pass an order allowing abatement of such amount as specified in the order. In the present case what the appellants have done is that they have discharged the duty liability after taking abatement of the duty for the period their factory had remained closed on their own. In the absence of order of abatement passed by the Commissioner, the Appellants are not eligible to take the abatement and discharge the duty liability by taking the amount of abatement claimed by them. We, therefore agree with the learned JDR that the appellants are liable to discharge the duty liability as determined by the Commissioner under Rule 96ZO of the Central Excise Rules, 1944. We, therefore uphold the demand of duty as confirmed by the Commissioner under the impugned order. However, taking into consideration the facts and circumstances of the case, we hold that imposition of penalty is not warranted in the present matter. Accordingly, we set aside the penalty imposed on the Appellants. The learned Advocate has requested that, the direction may be given to the Commissioner to decide the abatement claim filed by them expeditiously. Accordingly, we direct the Commissioner to take decision on the abatement claim filed by the Appellants within one month of the payment of duty confirmed against them under the impunged order. The appeal is disposed of in these terms.