SUNDER ISPAT LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants are manufacturers of iron and steel products and are paying duty under the Induction Furnace Annual Capacity Determination Rules, 1997. They applied for abatements for certain periods as their factory was alleged to be closed during the period 13.2.1998 to 23.2.1998. In terms of Rule 96ZO(2), they were required to inform in writing prior to the date of closure or on the date of closure. In the instant case, the intimations were acknowledged only on 16.2.1998 as 14.2.1998 and 15.2.1998 were closed on account of excise holidays. The intimation of restart production was given to the Assistant Commissioner on 23.2.1998 whereas it was given to the proper officer i.e., Superintendent of Central Excise only on 25.2.1998 and not on 23.2.1998 as was required.

(2.) The Commissioner after considering the submissions concluded as follows and denied the abatements claimed: Those who wish to claim abatement under Sub -section (3) of Section 3A of the Central Excise Act, 1944 are required to fulfil all the conditions prescribed in Clauses (a) to (e) under Rule 96ZO(2) of the Central Excise Rules, 1944. As per Clause (a) of the said Rule 96ZO(2), the Assistant Commissioner of Central Excise, is required to be informed in writing either prior to the date of closure or on the date of closure with a copy thereof to the Superintendent of Central Excise Copies of the written communication of the assessee regarding closure show that it was not reached to the Assistant Commissioner on 13.2.98 (the date of closure). The photocopy of the postal receipt of Hyderabad GPO shows that the same has been submitted in the GPO only on 15.2.98. Therefore, the assessee has clearly not fulfilled the first condition prescribed in Rule 96ZO(2)(a) of the Central Excise Rules, 1944. The written intimation was intact received by the Assistant Commissioner and the Superintendent only on 16.2.98. Similarly, though the written intimation about starting of production was submitted to the Assistant Commissioner on 23.2.98 itself copy thereof was not submitted to the Superintendent of Central Excise on the same day (23.2.98) Thus the condition prescribed in Rule 96ZO(2)(b) of the Central Excise Rules, 1944 has also not been partially fulfilled by the assessee. Furthermore, I find that the assessee had declared the following as on 23.2.98 on starting of production: Electricity meter Reading: 3269.0 DG Set meter reading: 2135.7 Physical stock: 18.576 MTs When the factory was verified on 25.2.98 by the Central Excise Officers the following readings/figures were noticed. Electricity meter Reading: 3584.2 DG Set meter reading: 2204.5 Physical stock: 32.79 MTs The above show that between the starting of production on 23.2.98 and the visit of the Central Excise Officers on 25.2.98, 14.214 MTs of MS Ingots were manufactured while there was a consumption of 315.2 Units of electricity and 68.8 units on the DG sets. These figures are extremely absurd. Nowhere can 14.214 MTs of MS Ingots be produced after a consumption of such a low quantity of power. It is well known that 800 to 1000 Units of power is required, for the production of one tonne of steel. This obviously shows that the declaration about stock, meter reading and non -production made by the assessee are not really reliable. From the above it is proved beyond doubt that in addition to not fulfilling all the conditions prescribed in Rule 96ZO(2) of the Central Excise Rules 1944, there are other evidences to prove that the claim of the assessee that the unit was closed between 13.2.98 to 23.2.98 is not beyond suspicion.

(3.) We have considered the material and heard the submissions and find: