Actual removal governs excise duty rate when removal dates are known, and penalty fails without mala fide intent.

Where excisable steel ingots are removed for re-rolling and the Department knows the dates of removal, the applicable duty rate is governed by the rule fixing liability on actual removal, not the rule relied on for a later stage of clearance. The expression "cleared" is treated as synonymous with removal for excise purposes, even if duty has not yet been paid. Penalty is not justified on these facts in the absence of mala fide intention; the stated penalty was therefore set aside and refunded.

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Issues: (i) Whether the rate of duty on steel ingots removed from the factory for re-rolling, with the dates of removal known to the Department, was governed by Rule 9A(1)(ii) or Rule 9A(5) of the Central Excise Rules, 1944; and (ii) whether the penalty imposed for the removals was sustainable.

Issue (i): Whether the rate of duty on steel ingots removed from the factory for re-rolling, with the dates of removal known to the Department, was governed by Rule 9A(1)(ii) or Rule 9A(5) of the Central Excise Rules, 1944.

Analysis: The removals were entered in the register and covered by challans, and the Department knew the dates on which the ingots were taken out for re-rolling. The removals were not treated as illegal or unauthorised, and the goods were not finally cleared for home consumption. Rule 9A(1)(ii) applies to goods cleared from a factory or warehouse on the date of actual removal, while Rule 9A(5) is not meant to govern cases where the date of removal is known. The expression "cleared" in excise law was treated as synonymous with "removal", whether duty was paid or not.

Conclusion: The applicable rate of duty was the rate in force on the date of actual removal under Rule 9A(1)(ii), and not the rate under Rule 9A(5), in favour of the assessee.

Issue (ii): Whether the penalty imposed for the removals was sustainable.

Analysis: The notice was issued only after the applicants' financial adviser raised doubts, and no mala fide intention was found on the part of the applicants. In the absence of such intention, the penalty could not be justified on the facts found.

Conclusion: The penalty of Rs. 2,000 was set aside and directed to be refunded, in favour of the assessee.

Final Conclusion: The revision applications succeeded, the duty was to be assessed on the date of actual removal, and the penalty was annulled.

Ratio Decidendi: Where the Department knows the date of removal of excisable goods from a factory, the rate of duty is governed by the rule fixing liability on actual removal, and a penalty is not warranted absent mala fide conduct.

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