Refund on excise duty during exemption interregnum rejected; later full exemption did not alter duty payable on clearances.

Duty on excisable goods cleared during the period when an exemption notification prescribed an effective 8% ad valorem rate was not refundable merely because the goods had been manufactured earlier when the rate was nil. The later restoration of full exemption did not change the duty position for clearances made in the interregnum. The Provisional Collection of Taxes Act, 1931 was held inapplicable to these facts, and the earlier Tribunal view could not stand against the later binding authority applying the same principle. The refund claim was therefore inadmissible and the duty collected for that period remained payable.

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Issues: Whether duty paid on excisable goods cleared during the period when an exemption notification granting an effective rate of 8% ad valorem was in force under Rule 8 of the Central Excise Rules, but before restoration of full exemption, was refundable on the footing that the goods had been manufactured earlier when the rate was nil and that the Provisional Collection of Taxes Act, 1931 applied.

Analysis: The goods remained excisable throughout. For the relevant period, the effective rate of duty was 8% ad valorem by virtue of an exemption notification, and the later restoration of full exemption did not alter the duty position for clearances made in the interregnum. The provisions of the Provisional Collection of Taxes Act, 1931 were held inapplicable to this situation, and the earlier decision relied on by the Tribunal did not survive in view of the later binding authority applying the same principle.

Conclusion: The refund claim was not admissible and the duty collected for the relevant period was not refundable.

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