Duty on inputs cleared as such follows the duty earlier suffered, not the prevailing rate at removal.

Inputs cleared as such were held liable to duty only at the rate earlier suffered by those inputs, not at the effective rate prevailing on the date of removal for home consumption. The Tribunal applied the Larger Bench ruling, which had already settled the conflict between competing views and confirmed that, where duty had been paid at the stage of original manufacture and the inputs were later cleared without use, the payable amount remained the duty previously suffered. A later contrary Bench view did not displace that position, and the Revenue's challenge was rejected.

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Issues: Whether inputs cleared as such were liable to duty at the effective rate prevalent on the date of removal for home consumption, or at the same rate as had been paid by the original manufacturer.

Analysis: The Tribunal noted that the question had already been settled by a Larger Bench decision holding that, where inputs already suffered duty and were utilised, the amount payable on clearance was the duty earlier suffered and not the effective rate prevailing at the time of removal. The attempt to prefer a different view taken by another Bench was rejected on the ground that the Larger Bench had already resolved the conflict between the competing lines of authority, and the non-consideration of one later decision did not undermine that resolution.

Conclusion: The respondents were liable to pay back the duty earlier suffered on the inputs, not the effective rate on removal, and the Revenue's appeal was rejected.

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