Additional excise duty credit could be adjusted against basic excise duty liability on the same clearances.

Additional excise duty paid on the goods was treated as a duty of excise under Section 3 of the Central Excise Act, 1944, and the separate accounting classification did not alter its substantive character. On that basis, together with the flexibility recognised under Rule 57F(12) of the Central Excise Rules, 1944, credit of the additional excise duty could be adjusted against the basic excise duty liability on the same clearances. The adjustment was permitted, and the claim was accepted in favour of the assessee.

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Issues: Whether additional excise duty paid on the goods could be adjusted against the basic excise duty liability payable on the same clearances.

Analysis: The duties in question were both collected under Section 3 of the Central Excise Act, 1944, and the additional excise duty was treated by the Court as a duty of excise in addition to the basic duty. The administrative separation of the receipts under different accounting heads was held not to control the substantive character of the levy. Support was also drawn from the flexibility recognised under Rule 57F(12) of the Central Excise Rules, 1944, which permitted use of credit across specified excise duties. In these circumstances, the earlier allowance of the same adjustment in the appellants' case reinforced the conclusion that the request was legally sustainable.

Conclusion: The adjustment was permitted and the amount paid as additional excise duty was held adjustable towards the basic excise duty liability. The issue was decided in favour of the assessee.

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