Excess duty under compounded levy may be adjusted against earlier liability, requiring re-quantification of the demand.

Excess duty paid for a subsequent period under the compounded levy scheme could be adjusted against an earlier duty liability when the levy was later reworked on actual clearances. The Tribunal treated the excess payment as relevant to the computation of the overall demand and directed re-quantification after giving effect to that adjustment. The demand was therefore to be recomputed on that basis, with the assessee getting credit for the excess paid in the later period.

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Issues: Whether excess duty paid by the assessee for the subsequent period under the compounded levy scheme could be adjusted against the duty liability for the earlier period, and whether the duty demand required re-quantification on that basis.

Analysis: The dispute arose after the compounded levy facility was withdrawn and duty was reworked on actual clearances. The assessee had continued to pay duty at the compounded rate for the later period, and the Tribunal accepted the position that if such payment exceeded the duty actually payable for that period, the excess could not be ignored and had to be given effect against the earlier liability. The matter therefore required re-computation of the demand on the basis of such adjustment.

Conclusion: The issue was decided in favour of the assessee, and the duty demand was directed to be re-quantified after adjusting any excess duty paid for the later period against the earlier period's liability.

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