Compounded levy procedure preserved concessional duty on captive yarn cleared during its currency despite later withdrawal.

Yarn cleared for captive consumption while the special compounded levy procedure under Rule 96-W was in force remained assessable under Notification No. 62/72-C.E., because that special scheme operated as a self-contained code for determining duty on the specified yarn. The later withdrawal of the procedure was only prospective and could not retrospectively deprive goods cleared during its currency of the concession already attached to them. Rules 9 and 9A were inapplicable since the special procedure governed the duty liability for such yarn. As a result, no further duty was payable on yarn cleared between 17-3-1972 and 23-7-1972.

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Issues: Whether yarn cleared for captive consumption during the period when the special compounded levy procedure under Rule 96-W was in force remained entitled to the concessional rate under Notification No. 62/72-C.E. notwithstanding the subsequent withdrawal of that procedure before the fabrics made from such yarn were cleared.

Analysis: The relevant scheme under Rule 96-W treated the duty liability on yarn falling under Item 18-E as being discharged under a special procedure, with the duty expressed in terms linked to the fabrics ultimately produced and payable in the manner prescribed under the special code. The notification in force during the relevant period granted the appellants the benefit of that procedure, and the duty liability on the yarn had to be worked out under that notification. The later withdrawal of the special procedure on 24-7-1972 applied only prospectively to yarn cleared thereafter and could not be used to reopen or deny the benefit already attached to yarn cleared for captive consumption while the special procedure was operating. Rules 9 and 9A did not govern the matter because the special procedure constituted a separate and self-contained code for the goods in question.

Conclusion: The yarn cleared for captive consumption between 17-3-1972 and 23-7-1972 remained assessable under Notification No. 62/72-C.E., and no further duty was payable on that quantity.

Ratio Decidendi: Where a special compounded levy procedure creates a self-contained mechanism for duty on specified yarn, the applicable rate and liability are governed by that special procedure for goods cleared during its currency, and a later withdrawal of the procedure does not retrospectively displace the benefit already accrued.

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