Compounded Levy Scheme declaration: penalty set aside, while excess duty refund must follow the statutory procedure.

Penalty was not warranted where the assessee opted for the Compounded Levy Scheme and filed the declaration with the Department under Rule 96ZNA, and it was not disputed that duty had been paid in excess; the penalty was set aside. The question of refund for excess duty was not decided on merits, and any such claim was left to be pursued through the statutory refund procedure prescribed by the Act and the Rules.

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Issues: Whether penalty was imposable for filing a declaration to opt for the Compounded Levy Scheme under Rule 96ZNA of the Central Excise Rules, 1944, and whether excess duty paid under the scheme had to be claimed under the statutory refund procedure.

Analysis: The appellants did not challenge the denial of the special procedure itself. The question decided was confined to penalty for having filed the declaration opting for the special procedure. Since the assessee had opted for the scheme and filed the declaration with the Department, and it was not disputed that duty had been paid in excess, penalty was not warranted. The question of refund was not adjudicated on merits, and any excess duty paid had to be claimed under the procedure prescribed by the Act and the Rules.

Conclusion: Penalty was set aside. Any claim for excess duty was left to be pursued under the statutory refund mechanism.

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