Double levy on duty-paid goods retained under statutory clearance facility rejected; rate change did not trigger differential duty.

Molasses already duty-paid and retained in kachcha pits under Rule 173H for later clearance could not be subjected to a second levy merely because the duty rate increased before physical removal. On these facts, Rule 9A did not justify demanding differential duty at the time of clearance, since the goods had already suffered duty and were held within the statutory facility for subsequent removal without fresh payment. The demand for differential duty was therefore unsustainable, and the assessee succeeded.

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Issues: Whether differential duty could be demanded on molasses already duty-paid and retained in kachcha pits under Rule 173H when later cleared from the factory, and whether Rule 9A applied to such clearance.

Analysis: The molasses had already suffered duty and were permitted to remain inside the factory under the facility contemplated by Rule 173H for subsequent clearance without payment of duty. The same goods could not be subjected to duty again merely because the rate of duty increased before physical clearance. On these facts, the relevant date for applying Rule 9A was not attracted so as to justify a fresh demand of differential duty.

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

Ratio Decidendi: Goods that have already suffered duty and are retained under a statutory facility for later clearance without payment of duty cannot be subjected to a second levy merely because the duty rate changes before actual removal.

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