Abatement under compounded levy scheme must be examined for factory closure, not as a fresh capacity redetermination.

In a compounded levy dispute, the Madras HC treated the assessee's grievance as a claim for abatement during the period when the factory was closed and the furnaces were not functioning, rather than a request for fresh redetermination of annual production capacity. It clarified that, on remand, the Commissioner must confine consideration to abatement under Rule 96ZO(3) and the applicable provisions. The Court found the dispute to be narrow, held that no substantial question of law arose, and dismissed the Revenue's appeal.

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Issues: Whether, in an appeal arising from determination of duty under the compounded levy scheme, the assessee's claim was one for abatement for the period when the factory was shut down and the furnaces were not functioning, and whether the remand direction had to be confined to consideration of such abatement under Rule 96ZO(3).

Analysis: The dispute was held to be narrow and no substantial question of law arose. The assessee's case, on a reading of the original adjudication, was treated as a claim for abatement for the period of closure and non-operation, not for a fresh redetermination of annual capacity of production. The direction of the Tribunal was therefore clarified so that, on remand, the Commissioner would consider the claim in accordance with Rule 96ZO(3) and the other applicable provisions.

Conclusion: The Revenue's appeal was dismissed, and the Commissioner was directed to decide the claim only as one for abatement under Rule 96ZO(3) and the applicable provisions.

Ratio Decidendi: Where the assessee's grievance under the compounded levy regime is in substance a claim for abatement for the period of factory closure or non-operation, the authority on remand must examine the matter as an abatement claim under the governing rule and not as a fresh redetermination of capacity.

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