Compounded levy scheme cannot trigger double excise duty when the assessee did not opt for capacity-based assessment.

Where an assessee has not opted for a compounded levy scheme, excise duty cannot be fastened on the basis of furnace capacity and again on the standard rate for the same production. The Court accepted the Tribunal's factual finding that the assessee had not chosen duty payment under the capacity-based scheme, as the record showed it was ordinarily manufacturing alloy steel and allied products and only incidentally producing non-alloy steel products. On that basis, the capacity-based levy had no application, and the attempt to impose a second duty burden on the same goods was rejected.

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Issues: Whether the assessee had opted for the capacity based compounded levy scheme and, if not, whether excise duty could be demanded twice, first on furnace capacity and again at the standard rate on the same goods.

Analysis: The Tribunal's finding, accepted on appeal, was that the assessee had not opted for duty payment under the compounded levy scheme. The record, including the letter dated 11-9-1997, showed that the assessee stated it was ordinarily manufacturing alloy steel and allied products and only incidentally producing non-alloy steel products. In that factual situation, the revenue basis for applying the capacity based scheme did not survive. The Court also agreed that once the assessee had not opted for the compounded levy method, duty could not be levied twice, first by reference to furnace capacity and again on the standard rate basis for the same production.

Conclusion: The assessee was not liable under the capacity based scheme, and the attempt to impose a second duty burden on the same goods was rejected.

Final Conclusion: The revenue's appeal failed and the Tribunal's view that standard rate duty applied, without double levy under the compounded levy scheme, stood undisturbed.

Ratio Decidendi: Where an assessee has not opted for a compounded levy scheme, duty cannot be fastened on the basis of furnace capacity and simultaneously again at the standard rate on the same production.

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