Belated annual capacity determination cannot sustain duty recovery after acknowledged closure intimation under Rule 96ZP.

Where the department had acknowledged receipt of the assessee's closure intimation, a belated determination of annual capacity production under Rule 96ZP could not support duty recovery. The rule required annual capacity production to be determined at the beginning of the relevant year, and an order passed much later in October 1998 could not override the earlier closure notice already on record. On that basis, the demand was held unsustainable and relief was given to the assessee.

---

---

Issues: Whether the demand could be sustained when the assessee had intimated closure of the factory and the determination of annual capacity production was made after the relevant period.

Analysis: The intimation of closure was found to have been received by the department, as evidenced by its seal on the copy of the letter. The determination of annual capacity production was required to be made under Rule 96ZP at the beginning of the year, but the order was passed only in October 1998. The delayed determination could not override the closure intimation already on record, and the demand based on such belated order was not sustainable.

Conclusion: The demand was not sustainable and the appeal was allowed in favour of the assessee.

Final Conclusion: Belated determination of annual capacity production, after acknowledged closure intimation, could not justify recovery of duty.

Ratio Decidendi: Where the department has acknowledged receipt of a closure intimation, annual capacity production must be determined at the beginning of the relevant year under Rule 96ZP, and a later determination cannot sustain duty recovery.

---