Assessable value under Rule 196A remains tied to the original valuation unless the rule expressly changes it.

Rule 196A of the Central Excise Rules, 1944 applies to surplus inputs removed with prior approval of the proper officer, and not to removals covered by Rule 196 for unaccounted or unexplained losses. The rule fixes the rate of duty and tariff valuation, if any, as on the date of actual removal, but it does not by itself require the assessable value to be taken on that date. Where duty was already paid at the applicable rate on the assessable value prevailing when the goods entered the factory, the rule did not authorise a fresh demand on a higher assessable value at removal.

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Issues: Whether duty on surplus inputs removed under Chapter X procedure with the approval of the proper officer could be demanded on the basis of the assessable value prevailing at the time of removal under Rule 196A of the Central Excise Rules, 1944.

Analysis: Rule 196 applies where the inputs are not duly accounted for or their loss is not satisfactorily explained, and was inapplicable because the inputs were removed with approval and on payment of duty. Rule 196A governs removal of surplus goods with prior approval of the proper officer and fixes the rate of duty and tariff valuation, if any, as on the date of actual removal. However, the rule did not prescribe that the assessable value should also be taken as on the date of removal. The duty had been paid at the applicable rate on the assessable value prevailing when the goods were brought into the factory, and the rule did not authorise demand of duty on a higher assessable value at the time of removal.

Conclusion: The demand was not sustainable under Rule 196A and the appeal failed.

Ratio Decidendi: Where surplus inputs are removed with prior approval under Rule 196A, the assessable value is not altered by the date of actual removal unless the rule specifically so provides; only the applicable rate of duty and tariff valuation, if any, are governed by the date of removal.

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