Excise duty liability survives an interim injunction, allowing straight recovery of differential duty once the restraint ends.

Excise duty is attracted on manufacture, and goods cannot be removed without payment of proper duty under Rule 9(1). Where an interim injunction allowed clearance of goods and postponed the department's collection of full duty, the underlying liability did not disappear. Once the injunction ended after the writ petitions failed, the differential duty could be recovered straightaway because only enforcement had been deferred. On these facts, the matter was not treated as clandestine removal, ordinary short levy, or a case requiring fresh proceedings under Section 11A, Rule 9(2), or Rule 10; the demand notices were therefore upheld.

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Issues: Whether the department could recover differential excise duty by a straight demand after the interim injunction was vacated, or whether recovery had to be initiated only under Section 11A of the Central Excises and Salt Act, 1944 or under Rule 9(2) or Rule 10 of the Central Excise Rules, 1944.

Analysis: Excise duty is attracted on manufacture and, under Rule 9(1), goods are not to be removed without payment of proper duty. The appellants were able to clear the goods during the subsistence of an injunction, and the department was thereby prevented from levying and collecting the full duty. Once the writ petitions failed and the injunction ceased, the duty liability already attached to the goods could be recovered; only enforcement of recovery had been postponed. On that basis, the case was not treated as one of clandestine removal, short levy in the ordinary sense, or a situation requiring a fresh adjudicatory proceeding under Section 11A. The precedents dealing with clandestine removal, penal consequences under Rule 9(2), or escaped levy under Rule 10 were held inapplicable on the facts.

Conclusion: The department was entitled to recover the differential duty straightaway, and the challenge to the demand notices failed.

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