Statutory primacy in excise duty redetermination requires actual-production assessment despite an earlier rule-based payment option.

Where a statutory scheme for duty redetermination conflicts with a subordinate rule, the statute prevails. The text states that Section 3A(4) of the Central Excise Act governs redetermination of duty liability on the basis of actual production, and that this consideration cannot be denied merely because the assessee had opted to pay under Rule 96ZO(3) of the Central Excise Rules, 1944. Failure to furnish supporting material may affect the merits of the claim, but it is not, by itself, a valid ground to refuse consideration under the statutory provision. The matter was remitted for fresh adjudication with an opportunity to produce evidence and be heard.

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Issues: Whether the assessee, having exercised an option under Rule 96ZO(3) of the Central Excise Rules, 1944, could still seek redetermination of annual capacity and duty liability on the basis of actual production under Section 3A(4) of the Central Excise Act, 1944.

Analysis: Section 3A(4) was treated as prevailing over Rule 96ZO(3) where there was inconsistency between the statutory provision and the rule. The prior direction required the Commissioner to determine duty liability on the basis of actual production, and the impugned rejection could not rest solely on the ground that the assessee had opted for payment under Rule 96ZO(3). If the assessee failed to furnish supporting material, that could affect the merits of the claim, but it was not a valid basis to deny consideration of redetermination under the statutory scheme.

Conclusion: The request for redetermination on actual production was required to be considered under Section 3A(4), and the rejection based on Rule 96ZO(3) was not sustainable.

Final Conclusion: The matter was sent back for fresh adjudication after setting aside the impugned order, with reconsideration of duty liability on the basis of actual production and after giving the assessee an opportunity to produce evidence and be heard.

Ratio Decidendi: Where a rule conflicts with the governing statutory provision, the statute prevails, and redetermination of duty liability under the statute cannot be denied merely because the assessee acted under the inconsistent rule.

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