Suo motu abatement under compounded levy upheld where rules gave entitlement without prescribing a separate claim procedure.

Under the compounded levy scheme for notified goods, abatement for factory closure of fifteen days or more could be taken suo motu where the rules created the substantive entitlement but prescribed no separate procedure for obtaining an abatement order or filing a prior claim. The assessee was therefore permitted to compute the reduced duty liability and adjust the excess against duty payable for the succeeding month, so long as the adjustment did not exceed the abatement otherwise admissible. The dispute was treated as revenue neutral, and the demand was held unsustainable.

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Issues: Whether, under the compounded levy scheme for notified goods, the assessee could suo motu compute and adjust abatement for the period of closure of the factory without first obtaining an abatement order or filing a prior claim before the authorities.

Analysis: The applicable rules provided for abatement where the factory did not produce notified goods for a continuous period of fifteen days or more, but they did not prescribe any separate procedure or require an express order of abatement. In the absence of such a procedural requirement, and where the amount adjusted did not exceed the abatement otherwise admissible, the assessee's act of calculating the reduced duty liability and setting off the excess against duty payable for the succeeding month was not contrary to the statutory scheme. The dispute was also treated as revenue neutral.

Conclusion: The assessee was entitled to take the benefit of abatement suo motu and adjust the excess duty against the duty payable for the next month. The demand was unsustainable and the appeal succeeded.

Ratio Decidendi: Where a compound levy rule grants abatement on factual entitlement but prescribes no procedure for obtaining it, the assessee may lawfully compute and set off the abated amount against future duty liability, provided the adjustment does not exceed the abatement admissible under the rules.

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