Compounded levy duty applies only to units manufacturing notified goods; unsupported demands against furnace and rolling mill failed.

Under the compounded levy regime, duty can be fastened only on a furnace or mill shown to have manufactured notified goods, and a de novo adjudication cannot go beyond the remand direction without contrary evidence. Furnace No. 2 was held outside the duty net because the record showed manufacture only of non-notified goods, apart from the admitted demand for August 1997. The rolling mill was also held not liable, as RT-12 returns, invoices, classification declarations and the RG-1 register supported manufacture only of alloy steel bars and rods, with no credible material to the contrary. The impugned de novo orders were set aside.

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Issues: (i) Whether duty could be fastened under the compounded levy provisions in respect of Furnace No. 2 when it manufactured only non-notified goods; and (ii) whether the rolling mill could be subjected to duty liability when the record showed manufacture only of alloy steel bars and rods.

Issue (i): Whether duty could be fastened under the compounded levy provisions in respect of Furnace No. 2 when it manufactured only non-notified goods.

Analysis: The Tribunal found that the earlier remand had already recorded a specific finding that Rule 96ZO(3) applied only to a furnace manufacturing notified goods. The record in the de novo proceedings did not show any change in the factual position. Since Furnace No. 2 had manufactured non-notified goods, the adjudicating authority could not travel beyond the remand direction or fasten duty liability on that furnace. The appellant's concession was confined only to the demand relating to August 1997.

Conclusion: Duty liability could not be fastened on Furnace No. 2 for the period in question, save for the admitted demand relating to August 1997.

Issue (ii): Whether the rolling mill could be subjected to duty liability when the record showed manufacture only of alloy steel bars and rods.

Analysis: The Tribunal held that there was no cogent or credible evidence to show manufacture of any goods other than alloy steel bars and rods. The RT-12 returns, invoices, classification declaration, RG-1 register, and the absence of contrary material supported the appellant's case. In the absence of evidence to the contrary, the earlier view in the assessee's own case was followed, and the unit could not be brought within the duty net under the relevant compounded levy provisions.

Conclusion: The rolling mill was not liable to duty under the compounded levy provisions for the impugned period.

Final Conclusion: The impugned de novo orders were unsustainable and were set aside, with the appeals substantially succeeding in favour of the assessee.

Ratio Decidendi: Under the compounded levy regime, duty liability attaches only to the furnace or mill actually manufacturing notified goods, and a de novo adjudication cannot exceed the scope of the remand direction in the absence of contrary evidence.

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