Duty rate must match each clearance unless specifically ordered higher; penalty for duty-free removal of excisable goods was sustained.

Duty under Rule 9A(5) had to be recovered at the rate applicable on each date of clearance unless the adjudicating authority specifically directed recovery at a higher rate; in the absence of such a notice and order, applying 8% for the entire period was unauthorized. Removal of excisable goods without payment of duty justified penalty, and the absence of suppression or misstatement did not negate the breach. The assessee therefore succeeded on the duty-rate question, but the penalty was sustained, leaving the appeal successful only in part.

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Issues: (i) whether duty could be recovered at the highest rate under Rule 9A(5) for the entire period without a specific adjudicatory finding and order; (ii) whether penalty was justified for removal of excisable goods without payment of duty.

Issue (i): whether duty could be recovered at the highest rate under Rule 9A(5) for the entire period without a specific adjudicatory finding and order.

Analysis: The recovery of duty had to follow the rate applicable on the dates of clearance unless the adjudicating authority specifically ordered recovery at the highest rate. In the absence of a show cause notice and adjudication directing application of the 8% rate for the whole period, the lower authorities could not substitute that rate on their own. Any attempt to recover at the highest rate without such order was unauthorized.

Conclusion: The duty was recoverable only at the correct rate applicable at the time of each clearance, and recovery at 8% for the entire period was not sustainable.

Issue (ii): whether penalty was justified for removal of excisable goods without payment of duty.

Analysis: The factory had removed excisable goods without payment of duty, which constituted a serious breach of the law. The absence of suppression or misstatement did not undo the fact of unauthorized clearance, and the penalty imposed was not excessive in the circumstances.

Conclusion: The penalty was upheld.

Final Conclusion: The assessee succeeded on the duty-rate issue, but the penalty was sustained, so the appeal succeeded only in part.

Ratio Decidendi: Duty demanded pursuant to adjudication can be recovered only at the rate lawfully applicable to the clearances unless the adjudicating authority has specifically ordered recovery at a different rate under the governing rule.

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