Compounded levy duty and abatement are confined to the statute and rules, with no implied refund relief.

Under the compounded levy regime for induction furnace units, duty liability is fixed by annual capacity under Section 3A and Rule 96ZO, and the scheme was treated as governing incidentally manufactured goods within the framework applied by the authorities. The commentary also states that the statutory scheme does not support a claim for proportionate abatement or refund based on the percentage of such goods, except where the rules expressly provide relief, such as on closure of the unit. The noted legal position is that liability and abatement must be found strictly within the statute and rules.

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Issues: (i) Whether duty on incidentally manufactured goods in a factory operating under Section 3A of the Central Excise Act, 1944 was payable at the normal tariff rate or was covered by the amount payable under Rule 96ZO of the Central Excise Rules, 1944. (ii) Whether proportionate abatement attributable to the percentage of incidentally manufactured goods was allowable.

Issue (i): Whether duty on incidentally manufactured goods in a factory operating under Section 3A of the Central Excise Act, 1944 was payable at the normal tariff rate or was covered by the amount payable under Rule 96ZO of the Central Excise Rules, 1944.

Analysis: The factory was working under the compounded levy regime introduced for induction furnace units. The scheme fixed duty liability by reference to annual capacity and the Board's circular explained that the capacity determination was confined to non-alloy steel ingots and billets, while other products continued to be assessed under the ordinary tariff regime. On the facts presented, the Tribunal found no legal infirmity in the view that the duty paid under Section 3A read with Rule 96ZO governed the liability in the manner determined by the authorities.

Conclusion: The duty on the incidentally manufactured goods was not held to require the grant of separate relief outside the Section 3A and Rule 96ZO regime.

Issue (ii): Whether proportionate abatement attributable to the percentage of incidentally manufactured goods was allowable.

Analysis: The Tribunal accepted the Revenue's position that the statutory scheme did not provide for the kind of refund or proportionate abatement claimed by the appellant, except to the extent expressly contemplated in the event of closure of the unit. No statutory basis was found for allowing abatement on the ground urged.

Conclusion: Proportionate abatement was not allowable.

Final Conclusion: The appeal failed in full and the order of the Commissioner (Appeals) was sustained.

Ratio Decidendi: Under the compounded levy scheme, duty liability and any abatement are governed strictly by the statute and the rules, and no refund or proportionate abatement can be claimed unless the scheme expressly provides for it.

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