The most common and most likely answer to this crossword clue is the 3 plus 4 letter word TAX FREE
I've seen this crossword clue in The Daily Telegraph
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Buddy explains!
The straight part
We know that "Excused duty" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case excused duty = tax free.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does TAX FREE mean?
TAX FREE adjective- Exempt from taxation