Compounded levy duty liability ends on closure and surrender of registration, leaving no continuing demand under Rule 96ZP(3).

CESTAT, Bangalore held that under the compounded levy scheme, duty liability under Rule 96ZP(3) did not continue after a unit had closed and the registration certificate had been surrendered. The dispute was not about abatement during ongoing manufacture, but whether any duty survived once operations had ceased. Reading the Trade Notice as requiring duty only until surrender of registration, the tribunal accepted that liability ended at that point and the assessee was entitled to relief from the demand.

---

---

Issues: Whether an assessee, having closed its unit and surrendered the registration certificate, remained liable to pay duty under Rule 96ZP(3) of the Central Excise Rules in the absence of a claim for abatement.

Analysis: The appellant had closed down its unit and surrendered the registration certificate. In that situation, the dispute was not one of abatement during continued manufacture, but whether duty could survive after cessation of operations and surrender of registration. The Trade Notice relied upon was understood to require continued discharge of duty only until the registration certificate was surrendered, which supported the assessee's stand that duty liability could not continue thereafter.

Conclusion: The duty liability did not survive after closure of the unit and surrender of the registration certificate, and the assessee was entitled to succeed.

Final Conclusion: The impugned order was set aside and the appeal was allowed, with the assessee obtaining relief from the duty demand.

Ratio Decidendi: Where a unit has closed down and the registration certificate has been surrendered, duty liability under the compounded levy scheme cannot continue beyond that point.

---