Revenue neutrality defeats differential excise duty where inter-unit clearances merely shift credit within the same assessee.

Differential central excise duty was not justified on clearances made to another unit of the same assessee because any additional duty paid at removal would have been available as credit to the recipient unit, making the arrangement revenue neutral. On that factual basis, the demand for differential duty, together with interest and penalty, could not be sustained, and the impugned order was set aside. The operative principle is that where duty paid on inter-unit clearances is simultaneously creditable within the same assessee's tax chain, confirmation of additional duty is not warranted on revenue-neutrality grounds.

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Issues: Whether differential central excise duty could be confirmed where the goods were cleared to the assessee's own unit and the duty paid at the time of clearance would have been available as credit to that unit, making the situation revenue neutral.

Analysis: The clearance was not to an outside buyer but to another unit of the same assessee. On payment of higher duty at the time of removal, the recipient unit would have been entitled to take corresponding credit. In such circumstances, the duty element would merely move from one pocket of the same assessee to another, and the exercise would be revenue neutral. The demand was therefore not justified on the facts of the case.

Conclusion: The demand for differential duty could not be sustained and the assessee succeeded on the ground of revenue neutrality.

Final Conclusion: The impugned order confirming duty, interest, and penalty was set aside, and the appeal was allowed.

Ratio Decidendi: Where duty paid on clearances to a unit of the same assessee is simultaneously available as credit to that unit, confirmation of differential duty is not justified on the ground of revenue neutrality.

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