Export under bond exemption extends to additional excise duty on textiles, with demand and penalty stayed.

Rule 13 of the Central Excise Rules, 1944 was treated as extending to additional excise duty on textiles and textile articles where the goods were exported under bond. The analysis states that section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 attracts the levy only when the goods are chargeable to central excise duty, and its sub-section (3) applies the Central Excises and Salt Act, 1944 and the related rules, including refund and exemption provisions, to the additional duty. On that basis, the export-under-bond exemption was regarded as available against the additional duty, and the demand and penalty were not enforced at the stay stage.

---

---

Issues: Whether Rule 13 of the Central Excise Rules, 1944, applied to goods exported under bond so as to exempt them from additional excise duty leviable under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978.

Analysis: Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 levies additional duty only where the goods are chargeable with excise duty under the Central Excises and Salt Act, 1944 read with the relevant notification. Sub-section (3) expressly applies the provisions of the Central Excises and Salt Act, 1944 and the rules made thereunder, including those relating to refunds and exemptions, to the levy and collection of the additional duty. Since the goods were exported under bond in terms of Rule 13 of the Central Excise Rules, 1944, the exemption available under that rule extended to the additional duty as well. The reasoning followed the same statutory scheme considered in the comparable High Court decision relied upon.

Conclusion: Rule 13 applied to the additional excise duty and the appellants had a strong prima facie case. The demand and penalty were not to be enforced at the stay stage.

---