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Issues: (i) Whether an assessee opting for the Compounded Levy Scheme under the Central Excise Act, 1944 and Rule 96ZP(3) of the Central Excise Rules, 1944 remained liable to pay duty for the full period despite closure of the production unit; (ii) Whether the writ petitions were liable to be rejected on the ground of delay and laches.
Issue (i): Whether an assessee opting for the Compounded Levy Scheme under the Central Excise Act, 1944 and Rule 96ZP(3) of the Central Excise Rules, 1944 remained liable to pay duty for the full period despite closure of the production unit.
Analysis: The petitioners had admittedly opted for the Compounded Levy Scheme and were bound by its terms. The closure of the production unit was relied upon to contend that duty could not be demanded for the period after cessation of production. The Court held that the scheme governed the liability and that, on the facts of the case, the closure did not displace the duty liability for the entire year as claimed by the department.
Conclusion: The issue was decided against the petitioners and in favour of the Revenue.
Issue (ii): Whether the writ petitions were liable to be rejected on the ground of delay and laches.
Analysis: The impugned order had been challenged after a long lapse of time, and the Court accepted the objection that the writ petitions were belated. The delay was treated as an independent ground supporting refusal of relief.
Conclusion: The issue was decided against the petitioners and in favour of the Revenue.
Final Conclusion: The writ petitions failed both on merits and on delay, leaving the demand order undisturbed and the connected miscellaneous petitions closed.
Ratio Decidendi: An assessee governed by the Compounded Levy Scheme remains bound by the scheme-based duty liability, and belated writ challenge may also be declined on the ground of laches.
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