Compounded Levy Scheme duty cannot be demanded for a strike-closed factory period absent production or a surrender requirement.

Duty under the Compounded Levy Scheme could not be demanded for a period when the factory remained closed due to labour strike, where the closure had been intimated to the department and there was no evidence of production during that time. The mere fact that the registration certificate was not surrendered did not create a legal basis for duty liability, as no requirement was shown making surrender a condition for relief during non-working periods. The demand for the closed period was therefore held unsustainable and was set aside in favour of the assessee.

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Issues: Whether duty could be demanded under the Compounded Levy Scheme for the period during which the factory remained closed on account of labour strike, merely because the registration certificate was not surrendered.

Analysis: The factory had been closed after intimation to the department and there was no evidence of production during the relevant period. No legal requirement was shown obliging the assessee to surrender the registration certificate as a condition for claiming relief for non-working periods, and the absence of such surrender did not by itself justify the duty demand.

Conclusion: The demand under the Compounded Levy Scheme for the closed period was unsustainable and was set aside in favour of the assessee.

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