Rule 57F(1)(ii) amendment limited removal liability to credit reversal, not duty at the later rate.

On removal of capital goods after the amendment to Rule 57F(1)(ii), the amount payable was confined to reversal of the credit actually availed at receipt, because the amended rule required payment equal to that credit and did not authorise duty computation at the rate prevailing on the date of removal. Earlier pre-amendment authority under Polar Industries was inapplicable, and the Larger Bench view in Asia Brown Boveri supported the same construction. The Revenue's short levy theory was rejected, and the assessee was held liable only to reverse the credit originally taken.

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Issues: Whether, on removal of capital goods after the amendment to Rule 57F(1)(ii), the assessee was required to reverse only the credit actually availed or to pay duty at the rate applicable on the date of removal.

Analysis: After 29-6-95, the governing text required payment of an amount equal to the credit availed in respect of the goods, and not duty calculated at the rate prevailing on the date of removal. The earlier decision in Polar Industries applied to the pre-amendment position and therefore did not govern the present dispute. The Larger Bench view in Asia Brown Boveri also supported the position that reversal of credit equivalent to the credit taken at receipt was sufficient. The Revenue's short levy theory was therefore unsustainable.

Conclusion: The assessee was required to reverse only the credit availed, and not duty at the higher rate on the date of removal.

Ratio Decidendi: Where the relevant rule, as amended, requires reversal of the credit availed, the amount payable on removal of capital goods is limited to the credit originally taken and cannot be enhanced by applying the duty rate prevalent on the date of removal.

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