Continuing excise levy applies on clearance where goods were manufactured under an existing duty regime and later exempted.

Special excise duty was treated as a continuing levy rather than a fresh impost introduced in 1988. Although the goods had earlier been exempted by notification, the exemption did not extinguish the underlying duty; it only removed liability for that period. Because the levy existed at the time of manufacture and remained in force when the goods were cleared, the duty became chargeable on clearance. Rule 9A governed the point of collection, and the 1988 Finance Bill and provisional collection declaration did not give the levy retrospective effect.

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Issues: Whether special excise duty was exigible on goods manufactured before the 1988 levy came into force but cleared after 1-3-1988, and whether the levy could be collected on clearance under Rule 9A.

Analysis: The Tribunal held that special excise duty was not a new impost in 1988 but a continuation of the same levy that existed in 1987, though the goods had earlier been exempted by notification. The exemption did not extinguish the levy itself. Since the levy was in force when the goods were manufactured and continued to be in force when they were cleared, the 1988 Finance Bill and the provisional collection declaration did not create any retrospective operation. Rule 9A governed the time of collection, and the duty became chargeable on clearance.

Conclusion: Special excise duty was rightly levied on the goods at the time of clearance, and the contention that the 1988 levy could not apply was rejected.

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