Bond transfer shortages attract duty under rewarehousing rules, and a wrong rule reference does not defeat the demand.

Shortages of mineral oil transferred in bond from one warehouse to another were governed by the bond and rewarehousing provisions, not by Rule 160 of the Central Excise Rules, 1944. Rule 153(3) required payment of full duty on any deficiency before discharge of the bond, while Rules 156A(4) and 156B were only procedural and did not control the levy. Limitation under Rule 10 did not bar the demand because the 90-day rewarehousing period was not the operative date for accrual of duty in these circumstances. A mistaken reference to Rule 160 did not invalidate a demand otherwise sustainable under Rule 153(3).

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Issues: Whether the demand of duty on shortages occurring during transfer of mineral oil in bond from one warehouse to another was governed by Rule 160 or by Rule 153(3) of the Central Excise Rules, 1944, and whether the demand was barred by limitation under Rule 10 of the Central Excise Rules, 1944.

Analysis: The shortages arose after the goods were removed in bond under Rule 152 and before rewarehousing at destination. Such shortages were not treated as non-accountal or improper removal attracting Rule 160. The bond scheme under Rule 153 governed the movement, and Rule 153(3) specifically required payment of full duty on any deficiency before discharge of the bond. Rule 156A(4) and Rule 156B were only procedural provisions and did not control the levy. The Court further held that the time limit under Rule 10 could not be applied by treating the 90-day period in Rule 156A(4) as the relevant date, because extension of time for rewarehousing could be granted and the duty obligation under Rule 153(3) had not yet crystallized in the manner contemplated by Rule 10. Mere reference to Rule 160 did not vitiate the demand where the demand was otherwise sustainable under Rule 153(3).

Conclusion: The demand was valid under Rule 153(3) of the Central Excise Rules, 1944 and was not time-barred under Rule 10; the contention of the assessee failed.

Ratio Decidendi: In a bond transfer of excisable goods, a duty demand for shortages is sustainable under the bond provisions governing rewarehousing, and a wrong reference to another rule does not invalidate the demand if the levy is otherwise authorized by the correct rule; limitation under Rule 10 does not apply where the duty obligation has not arisen in the manner contemplated by that rule.

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