Abatement claim under compounded levy scheme must be decided before confirming duty demand where closure compliance is disputed.

Abatement under the compounded levy scheme had to be examined on merits before any duty demand could be confirmed where the assessee had produced material showing closure and restart intimations, meter readings, and stock particulars under Rule 96ZB(2) of the Central Excise Rules, 1944. Because the earlier abatement request had been declined but the later representation seeking reconsideration remained undecided, the liability could not be fixed without first disposing of that claim. The adjudicating authority was required to consider the correspondence and compliance relating to closure before passing a fresh order on duty demand, and the confirmation of demand was therefore premature. The impugned order was set aside and the matter remanded.

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Issues: Whether the assessee's claim for abatement of duty under the compounded levy scheme was required to be considered on merits before confirming the demand, and whether the adjudication was premature.

Analysis: The assessee had produced material showing compliance with the prescribed intimation requirements for closure and re-start of the factory, meter readings, and stock particulars under Rule 96ZB(2) of the Central Excise Rules, 1944. The earlier request for abatement had been declined, but the subsequent representation seeking reconsideration had not been disposed of. In these circumstances, the demand could not be confirmed without first deciding the abatement claim, since the liability depended upon the outcome of that claim. The adjudicating authority was therefore required to examine the correspondence and the closure-related compliance before passing a fresh order on duty demand.

Conclusion: The confirmation of duty demand was held to be premature. The impugned order was set aside and the matter was remanded for fresh consideration of the abatement claim and thereafter the duty demand.

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