Excise exemption withdrawal takes effect from the notified date; budget-day removal rules do not by themselves create earlier duty liability.

Exemption from excise duty withdrawn by Notification No. 13/2002-CE operated only from 1.3.2002, so duty could not be demanded on cotton yarn cleared before that effective date. Rule 30A of the Central Excise (No. 2) Rules, 2001 regulated removal of goods during the budget period through permission and an undertaking, but a procedural breach of that rule did not itself accelerate the levy. The Provisional Collection of Taxes Act, 1931 was treated as confirming that the duty arose only from the notified date. A Revenue decision was distinguished because it depended on the assessee's undertaking to pay enhanced duty.

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Issues: Whether duty could be demanded on cotton yarn cleared before 1.3.2002 on the basis of Rule 30A of the Central Excise (No. 2) Rules, 2001 and the alleged clearance on budget day after the presentation of the Finance Bill.

Analysis: The exemption under Notification No. 13/2002-CE withdrew the earlier exemption only from 1.3.2002, and the liability to duty could not arise before that effective date. Rule 30A regulated removal of goods during the budget period and required permission and an undertaking, but a procedural breach of that rule did not by itself advance the date on which the exemption stood withdrawn. The provisions of the Provisional Collection of Taxes Act, 1931 reinforced the position that the levy took effect only from the notified date, and the decision relied upon by the Revenue was distinguished because it turned on an undertaking given by the assessee to pay enhanced duty.

Conclusion: The demand of duty on the clearances made before 1.3.2002 could not be sustained, and the assessee was entitled to relief.

Final Conclusion: The Tribunal held that the exemption withdrawal operated only from 1.3.2002, so clearances made before that date were not dutiable notwithstanding the budget-day procedural requirement under Rule 30A.

Ratio Decidendi: A procedural restriction on budget-day removal of goods cannot create a duty liability before the effective date of withdrawal of exemption fixed by the notification and the provisional tax framework.

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