Levy sugar duty must be assessed at clearance date, and later free sale reclassification cannot support differential demand.

Sugar validly cleared on 10-8-1978 at the levy sugar rate remained chargeable only at that rate, because duty was to be assessed on the basis prevailing on the date of clearance. A later attempt to treat the same quantity as free sale sugar and raise a higher differential duty was legally untenable, as the earlier Board decision had already resolved the substantive issue in favour of the assessee. Any excess amount recovered contrary to that determination was liable to be refunded forthwith.

---

---

Issues: Whether sugar cleared on 10-8-1978 as levy sugar remained chargeable only at the levy sugar rate, and whether any further differential duty could be demanded when the levy sugar system was later abolished and the goods were ultimately diverted to free sale.

Analysis: The Board's earlier order, which was noticed and adopted, held that the 300 quintals of sugar had been validly cleared on payment of duty at the levy sugar rate prevailing on the date of clearance. On that basis, the demand treating the same goods as free sale sugar for a higher duty burden was held legally untenable. The Tribunal accepted that the Board's decision resolved the substantive dispute in the assessee's favour and that any excess recovery, if made contrary to that decision, was liable to be refunded forthwith.

Conclusion: The duty demand based on the free sale sugar rate was untenable and the assessee was entitled to relief on the substantive issue.

---