Compounded levy relief withdrawal under a fiscal notification had to be examined by strict construction, with remand ordered for fresh decision.

The effect of Notification No. 2/99 withdrawing compounded levy relief had to be tested under strict construction of fiscal statutes, because the assessee had already paid January 1999 duty before the amendment and the unit relied on for denial was disposed of only later. The timing issue required determination of whether the withdrawal operated from 13-1-1999 or from 1-2-1999, and whether the earlier payment could be unsettled for that period. The impugned order was set aside and the matter was remanded to the Commissioner for fresh decision.

---

---

Issues: Whether the amended notification withdrawing the compounded levy benefit applied to the assessee from 13-1-1999 or from 1-2-1999, and whether the matter required fresh consideration by the Commissioner.

Analysis: The assessee had been operating under the compounded levy scheme and had paid the January 1999 duty by 5-1-1999 in terms of Rule 96ZQ(3) of the Central Excise Rules. The amendment through Notification No. 2/99 was issued on 13-1-1999, but the unit that formed the basis for denial of the benefit was disposed of only on 1-2-1999. The applicability of the amended notification had to be examined in the light of the strict construction of fiscal statutes and the principle that once the duty for the relevant period had been paid, the position for that period could not be unsettled without proper consideration of the legal effect of the notification.

Conclusion: The impugned order was set aside and the matter was remanded to the Commissioner for fresh decision; the appeal was allowed by way of remand.

---