- (1.) The revenue has approached this Court by filing the present appeal under Section 35G of the Central Excise Act, 1944 (for short the Act') arising out of order dated 19-1-2005, passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short, the Tribunal') by raising following substantial questions of law : "(i) Whether the Tribunal is correct in granting abatement when only one furnace and not the factory as a whole, was closed which was the prerequisite for claiming abatement as provided under Sub-section (3) of Section 3A of the Central Excise Act, 1944 ? (ii) Whether penalty imposed under Rule 96ZO(3) upon a manufacturer ofnon-alloy steel ingots falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and who opted to pay duty under Section 3A of the Central Excise Act, 1944 read with Induction Furnace Annual Capacity Determination Rules, 1997 but failed to pay the whole of the amount payable for any month by the 15th day or the last day of such month, as the case may be, is mandatory or discretionary in nature ?"
(2.) Briefly, the facts are that the assessee in the present case was having two induction furnaces of 2.5 MT and 3 MT respectively. A scheme for compounded levy of duty was introduced w.e.f. 1-9-1997 with newly inserted Section 3A in the Central Excise Act, 1944 (for short the Act') and correspondingly Rule 96ZO(3) was also added in the Central Excise Rules, 1944 (for short, the Rules'). The assessee is manufacturer of non-alloy steel ingots falling under Sub-heading 7206.90 of the First Schedule to Central Excise Tariff Act, 1985.
(3.) As far as 1st question is concerned, it is not in dispute that for both the furnaces, the capacity as per the Capacity Determination Rules, was assessed separately. Both the furnaces have independent and separate electricity connections and their production was recorded separately, which were duly checked and verified by the Officers of the Department while visiting the factory premises from time to time. It is also not in dispute that the Department had allowed independent/separate registration to both these furnaces, which were identified as Units A and B consisting of one furnace each. Proviso to Section 3A(3) of the Act provides for a claim for abatement of duty in case the factory remains closed for more than seven days and intimation about the same is furnished to the Department in advance. As one of the furnaces which according to the assessee is complete factory in itself, remains closed, claim for abatement of the duty was made by the assessee. The same was rejected by the adjudicating officer, for the reason that the factory, as a whole, was not closed and it was merely one furnace which was closed.;