Export under bond does not create total excise exemption where the notification preserves a recoverable amount.

Rules 12, 13, 14 and 14A of the Central Excise Rules, 1944 were read as an integrated export scheme, with Rule 13 serving only as a procedural facility for removal under bond and not as a source of total exemption. The notification retaining a specific unrebatable amount continued to apply to ATF K.50 supplied for export under bond, because the bond conditions and notification were inter-dependent. Exports under bond therefore did not extinguish the preserved duty liability, and the amount remained recoverable.

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Issues: Whether the amount retained under Notification No. 203/67-C.E. dated 9.9.1967, as amended by Notification No. 253/79-C.E. dated 18.8.1979, was payable on ATF K.50 supplied for export under bond under Rule 13 of the Central Excise Rules, 1944.

Analysis: Rules 12, 13, 14 and 14A of the Central Excise Rules, 1944 were read together as an integrated scheme governing export of excisable goods either on rebate or under bond without payment of duty. Rule 13 was treated as a procedural facility permitting removal of goods under bond, not as a provision granting total exemption from levy. The bond and the notification conditions showed that the unrebatable amount fixed under Notification No. 203/67-C.E. continued to be recoverable even in exports under bond, and there was no legal basis for treating such exports as free from that liability.

Conclusion: The amount was payable even on export under bond, and the assessee was not entitled to total exemption under Rule 13.

Final Conclusion: The export-under-bond arrangement did not extinguish the duty liability to the extent preserved by the notification, so the demand was upheld.

Ratio Decidendi: Where the statutory export scheme makes the relevant rules and notification inter-dependent, Rule 13 operates only as a procedural mechanism for export under bond and does not confer total exemption from the duty or amount specifically retained by the governing notification.

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