Prohibition on opting to pay duty for unconditionally exempt goods prevents CENVAT credit and mandates deposit and recovery. Section 5A(1A) prohibits a manufacturer from opting to pay duty on unconditionally fully exempted goods and bars entitlement to CENVAT credit on inputs for such goods. Amounts paid or collected as purported excise duty on exempted goods are not 'duty of excise' for CENVAT purposes; such sums must be deposited with the Government and any downstream CENVAT credit availed on them must be recovered under the CENVAT Credit Rules.