Natural justice and capacity re-determination: verified measurement and binding Supreme Court ruling defeated the assessee's challenge.

Verification of production capacity conducted in the presence of the assessee's authorised representative, with the measurement sheet signed and later acknowledged, did not amount to procedural unfairness; the natural justice challenge failed. A binding Supreme Court ruling also controlled the field: once an assessee opts to discharge duty under Rule 96ZP(3), fresh determination under Section 3A(4) cannot be insisted upon, so the Commissioner was justified in declining to reopen the determination. The earlier contrary remand direction did not survive the later Supreme Court position, and the impugned order was upheld.

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Issues: (i) Whether the re-determination of annual capacity of production violated the principles of natural justice. (ii) Whether the Commissioner was bound to reopen determination under Section 3A(4) despite the assessee having opted to discharge duty under Rule 96ZP(3).

Issue (i): Whether the re-determination of annual capacity of production violated the principles of natural justice.

Analysis: The measurement of the relevant factor was made in the presence of the assessee's representative, the measurement sheet was signed, and the correctness of the measurement was later confirmed in statement. The assessee was also unable to show that the material relied upon by the Commissioner established any procedural unfairness in the re-determination.

Conclusion: There was no violation of the principles of natural justice, and the challenge on this ground failed against the assessee.

Issue (ii): Whether the Commissioner was bound to reopen determination under Section 3A(4) despite the assessee having opted to discharge duty under Rule 96ZP(3).

Analysis: The Commissioner followed the later controlling law laid down by the Supreme Court, which held that once the option under Rule 96ZP(3) is exercised, the assessee cannot seek fresh determination under Section 3A(4). The earlier remand directions based on a contrary view did not survive after the binding Supreme Court ruling.

Conclusion: The Commissioner was in declining to apply Section 3A(4), and the assessee's contention failed against the assessee.

Final Conclusion: The impugned order was upheld and the appeal did not merit interference.

Ratio Decidendi: Where a binding Supreme Court ruling governs the field, it prevails over an earlier contrary remand direction, and an assessee who has opted for duty payment under Rule 96ZP(3) cannot insist on fresh determination under Section 3A(4); procedural fairness is not violated when verification is conducted in the presence of the assessee's authorised representative and is contemporaneously acknowledged.

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