Captive consumption duty follows the removal date, and later excise rate increases cannot be applied retrospectively.

For excisable goods lawfully removed for captive consumption, duty is chargeable at the rate in force on the date of authorised removal under Rule 9A of the Central Excise Rules, 1944. A later notification enhancing the rate cannot be applied retrospectively to goods removed before its commencement, even if the finished fabrics remained in stock. The differential excise duty demand was therefore unsustainable, and liability was confined to the duty already paid under the prevailing notifications.

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Issues: Whether differential excise duty could be demanded on blended yarn already authorisedly removed for captive consumption before the enhanced rates introduced by Notification No. 168/72-C.E. came into force, and whether the duty was payable at the rate prevailing on the date of removal under Rule 9A of the Central Excise Rules, 1944.

Analysis: The yarn had been lawfully removed for captive consumption in weaving and duty at the then prevailing rate had already been paid. Rule 9A required the rate of duty in force on the date of authorised removal to be applied. The later notification enhancing the rate could not be applied retrospectively to goods removed before its commencement, and the fact that the resultant fabrics were in stock did not alter the relevant date for duty on the yarn.

Conclusion: The demand for differential duty was not sustainable, and the appellants' liability was confined to the duty already paid under Notifications Nos. 63/72-C.E. and 64/72-C.E.; the appeals were allowed with consequential relief.

Ratio Decidendi: For excisable goods authorisedly removed for captive consumption, duty is chargeable at the rate in force on the date of removal under Rule 9A of the Central Excise Rules, 1944, and a subsequent enhancing notification cannot be applied retrospectively in the absence of express retrospective effect.

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