I am trying to develop a smart plug-in function. how to remove old version from

Did you already take a look at the documentation? forum.appian.com/.../Custom_Smart_Service_Plug-ins

Yes, my question is specific to the error I am getting and how to clean / un-register an existing function. When I delete the plug-in jar file, I do see, successful un-install message.

Yes I know. Once a plugin is registered with a given key you can not change the interface. It keeps registered even when uninstalled by deleting the JAR.

my problem is specific to function. I have changed name (key also) and redeployed. Though successful for first time, got the same error message on second attempt (no change in interface at all) ?

When you deployed it on your second attempt, did you make any further changes to the plug-in at that point? (i.e. added new input/output param?)
What you may want to try is changing the Key one more time to something unique and deploying the plug-in again. See if that works.

Also, be sure to update the <version> tag in <plugin-info> in the appian-plugin.xml for your plugin, so that Appian knows which version is newer.

For plugin functions, you can change the parameters without issues, but be aware this will break any existing calls to the function. Smart Services won't allow you to change parameters without also changing the key.

I found the root cause. I had some old process instances still referring to old version. Once I removed all test processes that I don't need anymore, I have no issues now.