6. Quantification of abatement amount. - The amount of abatement for a month shall be calculated using the following formula:

A=(C/N)×D

Where:

A = Amount of Abatement claimed

C = Total Cess liability for the machine for the month

N = Total number of days in the month

D = Total number of continuous days the machine was inoperative in the month

ILLUSTRATION 1: A REGISTERED PERSON IS ENGAGED IN THE MANUFACTURE OF SPECIFIED GOODS USING A HIGH-SPEED POUCH PACKING MACHINE WITH A PACKING SPEED OF 700 POUCHES OF 2.5 GRAMS PER MINUTE. THE MONTHLY CESS LIABILITY FOR SUCH A MACHINE UNDER SL. NO. 2 OF SCHEDULE II OF THE ACT IS ₹ 2,02,00,000. THE MACHINE REMAINS INOPERATIVE AND SEALED FROM THE 1ST DAY OF SEPTEMBER TO THE 19TH DAY OF SEPTEMBER (BOTH DAYS INCLUSIVE), AND THE MACHINE IS DE-SEALED ON THE 20TH DAY OF SEPTEMBER. THE APPLICATION FOR CLAIMING ABATEMENT MAY BE FILED BY THE REGISTERED PERSON BY 20TH OCTOBER (THE MONTH SUCCEEDING THE MONTH IN WHICH THE MACHINE WAS INOPERATIVE AND SEALED).

The mount of abatement of cess shall be calculated as follows: —

(i) Particulars of non-operation:

Total number of days in the month (September) (N): 30

Number of continuous days the machine was inoperative (D): 19

Amount of cess paid for the month for the machine (C): ₹ 2,02,00,000

(ii) Computation of Abatement Amount (A):

A =(2,02,00,000/30) ×19=₹ 1,27,93,333

(iii) Adjustment: The amount of ₹ 1,27,93,333 shall be allowed as an abatement by the proper officer in the order issued in say, October. The same shall be adjusted against the cess liability for November by the registered person.  

¹[Illustration 2: A registered person is engaged in the manufacture of specified goods using a high-speed pouch packing machine with a packing speed of 700 pouches of 2.5 grams per minute. The monthly cess liability for such a machine under Sl. No. 2 of Schedule II of the Act is ₹ 2,02,00,000. The machine is sealed on the 20^th day of July and is desealed on the 11th day of August. The total period of continuous non-operation is 22 days (exceeding fifteen days). The application for claiming abatement may be filed by the registered person by 20^thSeptember (the month succeeding the month in which the machines were inoperative and sealed).

The amount of abatement of cess shall be calculated as follows: —

(i) Particulars of non-operation for July:

Total number of days in the month (July) (N): 31

Number of continuous days in the month the machine was inoperative (D): 12

Amount of cess paid for the month for the machine (C): ₹ 2,02,00,000

(ii) Computation of Abatement Amount for July(A1):

A1 = (2,02,00,000/31) × 12 = ₹ 78,19,355

(iii) Particulars of non-operation for August:

Total number of days in the month (August) (N): 31

Number of continuous days in the month the machine was inoperative (D): 10

Amount of cess paid for the month for the machine (C): ₹ 2,02,00,000

(iv) Computation of Abatement Amount for August (A2):

A2 = (2,02,00,000/31) × 10 = ₹ 65,16,129

(v) Adjustment: The amount of ₹ 1,43,35,484 (A1+A2) shall be allowed as an abatement by the proper officer in the order issued in say, October. The same shall be adjusted against the cess liability for November by the registered person.]₁