Budget eve removals under Rule 224(2A) bind assessees to enhanced duty where they undertook to pay the differential levy.

Rule 224(2A) operates as a special provision for removal of goods on the eve of the budget and overrides the general rule linking duty to the date of removal. Where an assessee obtains permission under that dispensation on an undertaking to pay duty at the enhanced rate, the undertaking is enforceable and the assessee cannot later avoid the differential levy by relying on the timing of the notification or the general rule. The earlier authorities cited were distinguishable on materially different facts. The assessee was therefore liable for the enhanced duty.

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Issues: Whether an assessee who removed goods on the eve of the budget under Rule 224(2A) and gave an undertaking to pay duty at the enhanced rate could avoid the differential duty on the ground that the notification enhancing the duty was issued after removal.

Analysis: Rule 9A is a general provision fixing duty with reference to the date of removal in ordinary cases, but Rule 224 operates as a special provision governing removal on the eve of the budget and begins with a non obstante clause. Under Rule 224(2A), permission to remove the goods is granted only on the undertaking to pay duty at the enhanced rate, if any, applicable with effect from the next day. The assessee had sought and obtained the benefit of removal under this special dispensation, and the enhanced levy was introduced by the budget notification with effect from 1-3-2000. The undertaking was therefore enforceable, and the assessee was barred by estoppel from disputing liability after availing that concession. The cited earlier decisions supporting the assessee did not control the present facts because they did not arise on the same footing of Rule 224(2A) or involved materially different questions.

Conclusion: The assessee was bound by the undertaking and liable to pay the differential duty at the enhanced rate; the issue was answered in favour of the Revenue.

Ratio Decidendi: Where goods are removed on the eve of the budget under Rule 224(2A) pursuant to an undertaking to pay enhanced duty, the assessee cannot avoid the differential levy by relying on the date of the notification or the general rule on date of removal, and the undertaking is enforceable against the assessee.

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