Compounded levy re-determination must follow final remand directions and actual production basis under excise law.

Where an earlier remand and later final order on the same excise controversy had attained finality, the authorities were bound by those directions and could not re-impose duty under the compounded levy basis. The commentary explains that, under Section 3A(4) of the Central Excise Act, duty had to be re-determined with reference to actual production once the statutory mechanism and prior binding orders required that course. A contrary attempt by the revenue was therefore unsustainable, and the matter had to be sent back for fresh determination in accordance with the earlier directions.

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Issues: Whether the appellants, having earlier opted for the compounded levy scheme and later sought determination of duty on actual production, were entitled to re-determination of duty under Section 3A(4) of the Central Excise Act, 1944 instead of being fastened with duty on the compounded levy basis for the relevant period.

Analysis: The dispute had already been considered in earlier proceedings between the same parties, where the matter was remanded for determination of annual capacity of production and re-determination of duty on actual production basis under Section 3A(4). The subsequent challenge by Revenue to that approach was dismissed, and the later Supreme Court order affirmed that the earlier proceedings had attained finality and operated as res judicata. In this background, the impugned order could not stand, and the adjudicating authority was required to follow the earlier directions and determine duty with reference to actual production. The attempt to proceed on a basis contrary to Section 3A(4) and the earlier final directions was therefore unsustainable.

Conclusion: The appellants were entitled to re-determination of duty on actual production basis, and the impugned order was set aside.

Final Conclusion: The appeals succeeded and the matter was sent back to the adjudicating authority for fresh determination of duty in accordance with the earlier binding directions.

Ratio Decidendi: Where an earlier remand or final adjudication on the same controversy has attained finality, the authorities must abide by it, and duty under a compounded levy arrangement cannot be re-imposed contrary to the statutory mechanism for re-determination on actual production.

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