Compounded levy under Rule 96ZP(3) cannot be exited by closure notice alone; duty reworking under Rule 96ZP(1) fails.

An assessee that had opted for the compounded levy scheme under Rule 96ZP(3) could not be treated as having switched out of that scheme merely because a closure notice was issued. A notice of closure did not amount to a formal withdrawal from Rule 96ZP(3), and the cited Supreme Court position required any opting out to operate only from the start of the next financial year, not twice within the same year. Accordingly, determination of duty for 1999-2000 under Rule 96ZP(1) was unsustainable, and the period remained governed by Rule 96ZP(3).

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Issues: Whether duty for the period 1999-2000 could be determined under Rule 96ZP(1) after the assessee had opted for the compounded levy scheme under Rule 96ZP(3), merely on the basis of a closure notice.

Analysis: The assessee had elected to operate under Rule 96ZP(3) and there was no formal withdrawal from that scheme. A notice informing closure of the mill did not amount to an option to opt out of Rule 96ZP(3). The scheme position, as applied in the cited Supreme Court rulings, was that a manufacturer could not switch twice within the same financial year and any opting out would operate from the beginning of the next financial year. On that basis, the Commissioner was not justified in extending Rule 96ZP(1) for 1999-2000.

Conclusion: The determination for 1999-2000 under Rule 96ZP(1) was unsustainable and the period had to be governed by Rule 96ZP(3), in favour of Revenue.

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