Differential excise duty recoverable after injunction ends; Section 11A procedure not required for postponed levy.

Where excisable goods were removed during the operation of a court injunction that prevented full levy and collection of duty, the later demand for the unpaid differential duty was treated as a straight recovery of duty already attracted but postponed by the court order. The High Court held that the matter was not one of short-levy, non-levy after assessment, or clandestine removal, so the elaborate procedure under Section 11A of the Central Excises and Salt Act, 1944, and Rule 9(2) of the Central Excise Rules did not apply. The departmental demand by notice was therefore upheld once the injunction ceased to operate.

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Issues: Whether the department could recover differential excise duty straightaway after the writ petitions failed, or whether the demand had to be proceeded with under Section 11A of the Central Excises and Salt Act, 1944 or under Rule 9(2) of the Central Excise Rules.

Analysis: The goods had been removed during the subsistence of an injunction which prevented the department from levying and collecting the full duty. On dismissal of the earlier writ petitions, the legal bar created by the court order disappeared, and the duty already attracted by the charging provision became recoverable. The Court held that this was not a case of short-levy, non-levy after assessment, or clandestine removal under Rule 9(2), and therefore the elaborate procedure under Section 11A was inapplicable. The demand was treated as a straight recovery of duty lawfully due but postponed by the court's order, and the cited authorities dealing with clandestine removal or post-assessment recovery were distinguished.

Conclusion: The department was entitled to recover the differential excise duty by notice, and the challenge to the demand failed.

Final Conclusion: The writ appeals were rejected, and the departmental demand for the unpaid excise duty was upheld as a valid recovery after the injunction ceased to operate.

Ratio Decidendi: Where excisable goods are removed while recovery of the proper duty is stalled only because of a subsisting court injunction, the subsequent demand for the unpaid duty is a permissible straight recovery of duty already attracted, and not a proceeding requiring Section 11A or proof of clandestine removal under Rule 9(2).

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