Compounded levy duty liability under amended excise rules upheld where manufacturing had already begun before the claimed opt-out date.

The article addresses liability to compounded levy duty under amended Rule 92(B) of the Central Excise Rules, 1944, where the assessee claimed to have opted out of the scheme before production began. The factual record showed cane crushing and rab manufacture had already commenced on 27-12-1975 in two crystallizers, before duty was paid for the relevant week. On that basis, the claim that duty arose only from the date of starting the centrifugal was rejected, and the cited High Court decision was treated as inapplicable on the facts. The petitioners were therefore held liable under the compounded levy scheme.

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Issues: Whether the petitioners were liable to pay compounded levy duty for the 4th week of December 1975 under the amended Rule 92(B) of the Central Excise Rules, 1944 and the relevant notification, despite their claim that they had opted out of the compounded levy scheme before commencing production.

Analysis: The petitioners had relied on their alleged intimation to the excise authorities and on the amendment to Rule 92(B) by Notification No. 240/75 dated 29-12-1975 to contend that duty liability under the compounded levy scheme would arise only from the date of start of the centrifugal. The records, however, showed that the factory was found crushing cane and manufacturing rab in two crystallizers on 27-12-1975, indicating that manufacturing operations had already started without payment of compounded levy for the relevant week. The claim that the petitioners had decided to work under the standard procedure was found untenable, and the cited High Court decision was held to be inapplicable on the facts.

Conclusion: The petitioners were liable under the compounded levy scheme, and the revision was rejected.

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