Limitation for short-levied excise duty: openly cleared goods under nil assessment must be recovered under the specific time bar.

Excise duty recovery for openly cleared goods assessed at nil rate due to departmental inadvertence had to proceed under the specific limitation provision in Rule 10 of the Central Excise Rules, 1944. Rule 9(2) applies only to clandestine or contravening removal with duty evasion, so it could not sustain the demand notice on these facts. The residuary Rule 10-A also could not be used where a specific provision governed recovery of short-levied duty. As Rule 10 required notice within three months, the demand was time-barred and liable to be quashed.

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Issues: Whether the demand notice for excise duty could be sustained under Rule 9(2) of the Central Excise Rules, 1944, or under Rule 10-A of the Central Excise Rules, 1944, or whether it was barred by limitation under Rule 10 of the Central Excise Rules, 1944.

Analysis: The goods were cleared openly and with the knowledge of the Department, and the clearance was under a nil assessment resulting from an officer's inadvertence in not enforcing the later notification. On the reasoning applied, Rule 9(2) is attracted only where goods are removed in contravention of the rule in a clandestine manner with evasion of duty, which was not the position here. The Court also applied the principle that where a specific provision governs recovery of short-levied duty, the residuary Rule 10-A does not apply. The proper provision was therefore Rule 10, which required the notice to be issued within three months.

Conclusion: The demand notice was not sustainable under Rule 9(2) or Rule 10-A and was time-barred under Rule 10; it was held invalid and liable to be quashed.

Ratio Decidendi: Where excisable goods are cleared openly under a nil assessment due to departmental inadvertence, recovery of the short-levied duty must proceed under the specific limitation provision, and neither the clandestine-removal provision nor the residuary recovery provision can be invoked to bypass that limitation.

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