Redetermination of annual production capacity cannot be refused merely because duty was earlier paid under the optional rule.

The statutory right to seek redetermination of annual capacity of production under Section 3A(4) could not be denied solely because the assessee had earlier opted to discharge duty under Rule 96ZO(3). The Tribunal held that the request had to be examined on the basis of actual production, with a fresh opportunity to adduce evidence before the jurisdictional Commissioner. The rejection of redetermination was therefore set aside and the matter remanded for reconsideration under Section 3A(4) in favour of the assessee.

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Issues: Whether the assessee's request for redetermination of the annual capacity of production under Section 3A(4) could be rejected merely because it had earlier opted to discharge duty liability under Rule 96ZO(3).

Analysis: The Tribunal followed earlier decisions holding that the statutory facility for redetermination of annual capacity of production is not taken away merely because the assessee had initially exercised an option under the rule for payment of duty. The matter was therefore required to be reconsidered on the basis of actual production, with a fresh opportunity to place evidence before the jurisdictional Commissioner.

Conclusion: The rejection of redetermination was set aside and the matter was remanded for fresh consideration under Section 3A(4). The issue was decided in favour of the assessee.

Ratio Decidendi: The right to seek redetermination of annual capacity of production under Section 3A(4) cannot be denied solely on the ground that the assessee had earlier exercised an option under Rule 96ZO(3).

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