Actual capacity governs textile stenter duty under compound levy, with abatement for closed chambers applied.

Under the compound levy scheme for textile stenters, duty under Section 3A of the Central Excise Act, 1944 is to be computed on actual effective capacity, with proportionate abatement where chambers are closed and sealed. The document notes that the stenter capacity had been provisionally and finally fixed on assumptions that did not reflect actual working conditions, and that an earlier decision in the same appellant's case had already applied the actual-capacity approach. On those facts, the demand, penalty and interest did not survive, and consequential relief followed.

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Issues: Whether the duty liability under the compound levy scheme for textile stenters had to be determined on the basis of actual capacity after taking account of closure of chambers and the corresponding abatement, and whether the demand and penalties could be sustained when the earlier decision in the same appellant's case had already adopted that approach.

Analysis: The appeal concerned determination of duty under Section 3A of the Central Excise Act, 1944 in respect of stenters whose capacity had been provisionally and finally fixed on assumptions that did not reflect the actual working condition of the Artos and Hi-tech stenters. The record showed that the relevant stenter chambers had been closed and sealed for part of the period, and the earlier decision in the appellant's own case had held that compound levy must be worked out on the basis of actual capacity, with closure of chambers and corresponding abatement duly considered. The Tribunal followed that prior ratio and treated the factual position as determinative of the duty liability.

Conclusion: The demand, penalty, and interest did not survive on the facts as determined, and the appeal was allowed in favour of the assessee with consequential relief.

Ratio Decidendi: Under the compound levy scheme for textile stenters, duty must be determined on the basis of actual effective capacity, and where chambers are closed and sealed, proportionate abatement must be granted while computing liability.

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