High Court

consumed in the factory itself. The Addl. Commissioner confirmed the demand of duty and imposed penalty by order dated

14.03.2017. The appeal filed by the appellant before Commissioner (Appeals) came to be rejected by order dated

27.04.2018 and the appeal filed before the Tribunal also came to be rejected on 04.09.2024. The present appeal has been filed against the three concurrent orders.

3. Learned counsel for the appellant made vehement submissions that Tribunal was not justified in dismissing the appeal. Submissions were made that the undisputed facts found were that though the moulds manufactured by the appellant were cleared without payment of duty to other factory under the cover of challans, the same were returned back after job work and were consumed for manufacture of finished goods and, therefore, the appellant was entitled to the benefit of the Notification No. 67/95CE dated 16.03.1995.

4. Further submissions were made that the present was a case of revenue neutrality inasmuch in case the amount of duty was paid by the appellant, the same would be available to it as CENVAT Credit of such capital goods and, therefore, the Tribunal was not justified in rejecting the plea raised. Submissions were made that the substantial questions of law arise from the order passed by the Tribunal and, therefore, the appeal be admitted.

5. Learned counsel for the revenue supported the orders impugned. Submissions were made that it is undisputed that the appellant had manufactured moulds and cleared them without payment of duty under cover of challans and without issuing any invoice, the manufactured goods had not been accounted for in the daily stock account, which was done only with a view to avoid payment of duty. The Notification No. 67/95CE dated 16.03.1995 has no application. Further submissions were made that if only on account of assessee being entitled to CENVAT Credit, if the requirement to pay the duty at first instance is given a go-bye, the scheme of CENVAT Credit would become redundant and every assessee for non payment of service tax or central excise duty on inputs/input services/capital goods would invoke the said proposition and, therefore, the orders impugned do not call for any interference.

6. We have heard the submissions made by counsel for the parties and have perused the material available on record.

7. All the three authorities, i.e., the adjudicating authority, the appellate authority and the Tribunal have concurrently found that the appellant was not entitled to any relief based on the plea sought to be raised pertaining to the fact that as claimed the moulds, which were cleared without payment of duty for getting the job work done, were returned back and consumed in the appellant's factory and on account of the purported revenue neutrality. Exhaustive discussions and reasons have been indicated for negating the plea as raised by the appellant. The Tribunal, after going through the Notification, relied on by the appellant, came to the conclusion that the same was not applicable, as the same applies only to those goods which are produced in the factory and used in the manufacture of finished goods within the factory of production. Once the goods leave the factory even for job work, the Notification had no applicability. The finding recorded in this regard cannot be faulted inasmuch merely because the goods in question, which were cleared without payment of duty, were again used by the appellant for production of finished goods, the fact that the same could be finished goods also cannot be ruled out and, therefore, the submissions made in this regard have rightly been negated.

8. Plea of revenue neutrality, based on the fact that the appellant would be entitled to CENVAT Credit, has also rightly been denied by the Tribunal, as accepting the said proposition would negate the very scheme of CENVAT Credit as every assessee for non payment of duty would claim that on account of entitlement to claim CENVAT Credit, the duty was not paid. Once the plea raised pertains to revenue neutrality, the same plea is sufficient for holding the appellant guilty inasmuch there was no reason in the given case not to pay the duty at the time of clearance of the goods when they were being sent for job work, as required under the law.

9. In view of the above discussion, we do not find any reason to interfere with the well reasoned order of the Tribunal upholding the concurrent findings recorded by the adjudicating authority and appellate authority. There is no substance in the appeal. The same is, therefore, dismissed. Order Date :- 24.2.2025 P.Sri. (Kshitij Shailendra, J) (Arun Bhansali, CJ)

consumed in the factory itself. The Addl. Commissioner confirmed the demand of duty and imposed penalty by order dated

14.03.2017. The appeal filed by the appellant before Commissioner (Appeals) came to be rejected by order dated

27.04.2018 and the appeal filed before the Tribunal also came to be rejected on 04.09.2024. The present appeal has been filed against the three concurrent orders.

3. Learned counsel for the appellant made vehement submissions that Tribunal was not justified in dismissing the appeal. Submissions were made that the undisputed facts found were that though the moulds manufactured by the appellant were cleared without payment of duty to other factory under the cover of challans, the same were returned back after job work and were consumed for manufacture of finished goods and, therefore, the appellant was entitled to the benefit of the Notification No. 67/95CE dated 16.03.1995.

4. Further submissions were made that the present was a case of revenue neutrality inasmuch in case the amount of duty was paid by the appellant, the same would be available to it as CENVAT Credit of such capital goods and, therefore, the Tribunal was not justified in rejecting the plea raised. Submissions were made that the substantial questions of law arise from the order passed by the Tribunal and, therefore, the appeal be admitted.

5. Learned counsel for the revenue supported the orders impugned. Submissions were made that it is undisputed that the appellant had manufactured moulds and cleared them without payment of duty under cover of challans and without issuing any invoice, the manufactured goods had not been accounted for in the daily stock account, which was done only with a view to avoid payment of duty. The Notification No. 67/95CE dated 16.03.1995 has no application. Further submissions were made that if only on account of assessee being entitled to CENVAT Credit, if the requirement to pay the duty at first instance is given a go-bye, the scheme of CENVAT Credit would become redundant and every assessee for non payment of service tax or central excise duty on inputs/input services/capital goods would invoke the said proposition and, therefore, the orders impugned do not call for any interference.

6. We have heard the submissions made by counsel for the parties and have perused the material available on record.

7. All the three authorities, i.e., the adjudicating authority, the appellate authority and the Tribunal have concurrently found that the appellant was not entitled to any relief based on the plea sought to be raised pertaining to the fact that as claimed the moulds, which were cleared without payment of duty for getting the job work done, were returned back and consumed in the appellant's factory and on account of the purported revenue neutrality. Exhaustive discussions and reasons have been indicated for negating the plea as raised by the appellant. The Tribunal, after going through the Notification, relied on by the appellant, came to the conclusion that the same was not applicable, as the same applies only to those goods which are produced in the factory and used in the manufacture of finished goods within the factory of production. Once the goods leave the factory even for job work, the Notification had no applicability. The finding recorded in this regard cannot be faulted inasmuch merely because the goods in question, which were cleared without payment of duty, were again used by the appellant for production of finished goods, the fact that the same could be finished goods also cannot be ruled out and, therefore, the submissions made in this regard have rightly been negated.

8. Plea of revenue neutrality, based on the fact that the appellant would be entitled to CENVAT Credit, has also rightly been denied by the Tribunal, as accepting the said proposition would negate the very scheme of CENVAT Credit as every assessee for non payment of duty would claim that on account of entitlement to claim CENVAT Credit, the duty was not paid. Once the plea raised pertains to revenue neutrality, the same plea is sufficient for holding the appellant guilty inasmuch there was no reason in the given case not to pay the duty at the time of clearance of the goods when they were being sent for job work, as required under the law.

9. In view of the above discussion, we do not find any reason to interfere with the well reasoned order of the Tribunal upholding the concurrent findings recorded by the adjudicating authority and appellate authority. There is no substance in the appeal. The same is, therefore, dismissed. Order Date :- 24.2.2025 P.Sri. (Kshitij Shailendra, J) (Arun Bhansali, CJ)