Export under bond without duty covers all excise duties, and time-barred demands fail absent fraud or suppression.

A notification permitting export of excisable goods under bond without payment of duty was read to cover both basic excise duty and special excise duty, because the wording and scheme extended to all duties of excise and was not confined to basic duty alone. On that basis, the demand for special excise duty on exported goods was unsustainable. The demand was also held barred by limitation for clearances covered by the notices, as the exports were under bond and departmental supervision and the notices did not allege fraud or suppression; the statutory six-month period therefore applied, and notices issued beyond that period could not support recovery. The assessee obtained relief accordingly.

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Issues: (i) Whether export of excisable goods under Rule 13(2) of the Central Excise Rules, 1944 and Notification No. 151/81 without payment of duty covered only basic excise duty or also special excise duty under the relevant Finance Acts; (ii) Whether the demand for duty was barred by limitation in respect of the clearances covered by the show cause notices.

Issue (i): Whether export of excisable goods under Rule 13(2) of the Central Excise Rules, 1944 and Notification No. 151/81 without payment of duty covered only basic excise duty or also special excise duty under the relevant Finance Acts.

Analysis: Rule 13(2) permitted export under bond without payment of duty, and the notification issued thereunder used language broad enough to cover all duties of excise. The scheme of the rule and the bond showed that the goods remained dutiable but payment was waived on fulfilment of export conditions. The reference in the notification to duty of excise was not confined to basic duty alone. The contrary contention based on the later validating legislation was not accepted on the facts of this case. The charging provisions of the Finance Acts also supported the view that where the basic duty was not payable because of the notification, no special excise duty survived on the exported goods.

Conclusion: The notification exempted the goods from liability to both basic excise duty and special excise duty, so the demand for special excise duty was unsustainable.

Issue (ii): Whether the demand for duty was barred by limitation in respect of the clearances covered by the show cause notices.

Analysis: The exports were under bond and under departmental supervision, and the notices did not allege fraud or suppression. On admitted facts, the demand had to be raised within six months from the relevant date. Several notices were issued beyond that period, and some were partly beyond it.

Conclusion: The demands were time-barred at least to the extent found by the Tribunal, and this furnished an additional ground of relief to the assessee.

Final Conclusion: The appeals succeeded in full, the impugned orders were set aside, and consequential relief followed.

Ratio Decidendi: A notification permitting export of excisable goods under bond without payment of duty, when read in its ordinary and natural sense, covers all duties of excise unless the language clearly restricts it, and a duty demand raised beyond the statutory limitation period cannot be sustained absent fraud or suppression.

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