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Issues: Whether the assessee was entitled to a revised special procedure application and corresponding compounded duty when the machine size was reduced during the relevant period under the compounded levy scheme.
Analysis: Rule 96ZA provides a special procedure for payment of duty in respect of specified goods, and Rule 96ZB fixes the amount payable per machine under the notified rate. The application for special procedure may cover a period of less than 12 months under Rule 96ZA(2), and the power to grant such permission had been delegated to the Assistant Commissioner. The assessee had informed the department of the reduction in machine size, submitted a revised application, and the fact of use of the smaller machine was not disputed.
Conclusion: The revised special procedure was permissible and the duty demand was unsustainable. The finding is in favour of the assessee.
Final Conclusion: The impugned order allowing revision of the special procedure was upheld and the revenue appeal failed.
Ratio Decidendi: Where the statutory scheme permits a special procedure application for a period shorter than 12 months and the competent authority is empowered to grant it, a revised application reflecting a genuine reduction in machine size cannot be rejected merely because the earlier special procedure had been fixed for the period.
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