Interim protection against excess central excise recovery under Section 3A(4) pending appeals on capacity-based duty liability.

Pending disposal of the appeals, the Tribunal treated the dispute over duty under Section 3A(4) of the Central Excise Act, 1944 as governed by its earlier decision on the same question and granted unconditional stay in one set of matters. For the remaining applicant, where the capacity determination was alleged to be excessive, it directed that collection should not exceed the duty liability attributable under Section 3A(4) until the appeals were decided. The operative effect was interim protection against recovery beyond the disputed liability pending final determination.

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Issues: Whether, pending disposal of the appeals, duty liability under Section 3A(4) of the Central Excise Act, 1944 was to be worked out on actual production or on the basis of capacity determined under the relevant annual capacity rules.

Analysis: The issue was treated as already covered by the Tribunal's earlier decision on the same question. For one set of applicants, the stay petitions were therefore allowed unconditionally. For the other applicant, the Tribunal accepted the submission that the capacity determination was alleged to be excessive and directed that collection should not exceed the duty liability arising under Section 3A(4) until the appeals were decided.

Outcome: Interim relief was granted in favour of the applicants, and the Revenue was restrained from collecting duty beyond the liability attributable under Section 3A(4) pending the appeals.

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