Appropriate excise duty on inputs removed as such is payable under the revised rule, not just the credit taken.

Rule 57AB(1)(b) requires that when inputs are removed as such after credit is taken, the appropriate excise duty leviable on those inputs must be paid, and the clearance must be under the prescribed invoice. The rule was treated as distinct from the earlier wording in Rule 57F(1), so the prior decision relied on was held inapplicable. On the facts, the duty demand was found to accord with the rule, and the reduced penalty was not further scaled down.

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Issues: Whether, on removal of inputs as such after availing credit, the duty payable is confined to the credit taken or is payable as appropriate excise duty under Rule 57AB(1)(b) of the Central Excise Rules, 1944, and whether the penalty called for further reduction.

Analysis: Rule 57AB(1)(b), read with its explanation, was held to be clear in requiring that when inputs are removed as such, the appropriate duty of excise leviable thereon must be paid as if the inputs had been manufactured, and such removal must be under cover of the prescribed invoice. The earlier decision relied upon, which turned on different wording in Rule 57F(1), was treated as inapplicable to the revised rule. On facts, the duty demand conformed to the rule, and the reduced penalty was considered nominal.

Conclusion: The duty demand was upheld and the plea for further reduction of penalty was rejected.

Final Conclusion: The appeal failed and the order of the lower authorities was left undisturbed.

Ratio Decidendi: Where a revised excise rule expressly requires payment of appropriate duty on inputs cleared as such, the duty is not restricted to the credit originally availed, and the demand must be determined according to that rule.

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