Unchanged tariff rate and revised exemption notification cannot justify duty demand above the duty already paid.

Where the tariff rate remained unchanged at 16% and a later exemption notification only reduced the effective rate to nil subject to a quantity restriction, a duty demand beyond 8% on the relevant clearances was treated as unsustainable. The discussion states that the notification regime did not create any enhanced duty liability, and that duty already paid at 8% could not be supplemented by a higher demand solely because the exemption structure changed.

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Issues: Whether the duty demand raised beyond 8% on the budget day clearances was sustainable when the tariff rate remained unchanged and the later notification only altered the effective rate and quantity restriction.

Analysis: The tariff rate of duty on the product continued at 16%. The earlier exemption notification was replaced by another notification under which the effective rate was reduced to nil, though subject to a quantity restriction. The appellants had already paid duty at 8% for the relevant clearances on 29-2-2000. In these circumstances, there was no increase in the duty rate warranting a demand above 8%.

Conclusion: The demand in excess of 8% was not sustainable and the impugned order was liable to be set aside in favour of the assessee.

Ratio Decidendi: Where the tariff rate remains unchanged and the applicable exemption or notification regime does not create an enhanced duty liability, a demand for duty above the duty already paid cannot be sustained.

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