Double levy on duty-paid goods retained for later clearance under Rule 173H was unsustainable despite higher duty rates.

Molasses already duty-paid and retained in kachcha pits under Rule 173H could not be subjected to a second duty levy merely because the rate increased before later clearance. The provision governing the relevant date for duty under Rule 9A did not apply to these facts. On that basis, the differential duty demand was unsustainable, and the assessee's challenge succeeded.

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Issues: Whether duty could be demanded again on molasses already duty-paid and retained in kachcha pits under Rule 173H when later cleared after an increase in the rate of duty, and whether Rule 9A applied to such goods.

Analysis: The goods had already suffered duty. Rule 173H permitted their retention within the factory premises in kachcha pits as a facility for later clearance without payment of duty. On that footing, the same goods could not be made to bear duty again merely because the rate had increased before actual clearance. The provision governing the relevant date for duty under Rule 9A did not apply to these facts.

Conclusion: The differential duty demand was unsustainable and the appeal succeeded in favour of the assessee.

Final Conclusion: Duty already paid on goods retained under Rule 173H could not be levied again on their later clearance, and the enhancement in duty rate did not justify a second levy.

Ratio Decidendi: Goods that have already suffered duty and are retained under Rule 173H for subsequent clearance without payment of duty cannot be subjected to duty again on the basis of an increased rate at the time of actual removal, and Rule 9A is inapplicable to such a case.

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