Unconditional exemption bars voluntary excise duty payment; later amendment was only clarificatory, confirming duty was not payable.

An unconditional exemption applies to the goods themselves and, once in force, reduces the excise duty payable to nil. A manufacturer cannot disregard such an exemption and voluntarily pay duty merely to create a duty incidence for commercial purposes. The exemption notification operates with statutory force as part of the taxing statute, so payment of duty on absolutely exempt goods is without authority of law. The 2005 amendment was treated as clarificatory, confirming the pre-existing position that duty shall not be paid on fully exempt goods rather than creating a new option to pay duty.

---

---

Issues: Whether a manufacturer of goods covered by an unconditional exemption notification could nonetheless elect to pay central excise duty on such goods and whether the 2005 amendment declaring that duty shall not be paid on absolutely exempted goods was clarificatory.

Analysis: An unconditional exemption operates on the goods themselves and does not depend on any act or omission by the manufacturer. The exemption notification, having statutory force, must be read as part of the statute, with the result that the duty payable on such goods is nil. The manufacturer therefore has no legal option to ignore the exemption and pay duty merely to create a duty incidence for downstream commercial purposes. The subsequent amendment was treated as removing doubts and confirming the existing legal position rather than introducing a new right to pay duty on fully exempt goods.

Conclusion: The manufacturer had no option to pay duty on absolutely exempt goods, and payment of duty on such goods was without authority of law. The appeal was liable to fail.

---