Compounded levy monthly duty remained payable in full; partial production did not justify pro rata relief without prescribed abatement compliance

Under the compounded levy scheme for re-rolling mills, duty was payable monthly on the basis of annual capacity of production, and the statutory liability was not reduced merely because the factory worked for only part of the month. Abatement was available only if the factory remained closed for more than seven days and the prescribed procedure for claiming that relief was followed. As the assessee sought pro rata payment without complying with the abatement requirements, the full monthly duty remained payable and no further relief was available on account of partial production; the appeal was dismissed.

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Issues: Whether an assessee who opted for the compounded levy scheme under Rule 96ZP(3) of the Central Excise Rules, 1944 was required to pay duty for the full month even though the factory worked only for part of the month, and whether abatement could be claimed without following the prescribed procedure.

Analysis: The assessee had elected to pay duty under the compounded levy regime for re-rolling mills, under which duty was payable on a monthly basis in fixed instalments according to the annual capacity of production. The benefit of abatement was available only when the factory remained closed for more than seven days and the procedure prescribed for claiming such abatement was followed. Since the assessee did not comply with the abatement procedure and sought to pay only on a pro rata basis for the days of actual working, the statutory monthly liability remained unchanged.

Conclusion: The assessee was liable to pay duty for the full month under Rule 96ZP(3), and no further relief was available on the basis of partial production. The appeal failed and was dismissed.

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