Excise duty cannot be demanded twice on job-work goods when duty has already been paid by the recipient.

Excise duty could not be demanded again on goods cleared for job work where the recipient had already discharged the applicable duty. Rule 12B of the Central Excise Rules, 2002 permits clearance on a job work basis without upfront duty, subject to the recipient paying duty and completing formalities. On the stated facts, the goods had already suffered duty, so a second demand on the same goods was unsustainable even if the transaction was not fully within Rule 12B. The related penalty also had no independent basis and could not survive once the duty demand failed.

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Issues: Whether duty demand and penalty could be sustained when the goods were cleared on job work basis and duty had already been discharged by the recipient of the goods.

Analysis: Rule 12B of the Central Excise Rules, 2002 contemplated clearance of excisable goods on job work basis without payment of duty, subject to the recipient discharging the applicable duty and completing the required formalities. On the facts, the duty on the goods had already been paid by the recipient. Even if the transaction was not fully covered by Rule 12B, the goods had suffered duty and a second demand on the same goods could not be sustained. Once the duty demand failed, the connected penalty also had no basis.

Conclusion: The duty demand and penalty were not sustainable and were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded because no further excise duty could be demanded on goods that had already suffered duty through the recipient, and the consequential penalty also fell.

Ratio Decidendi: Excise duty cannot be demanded again on the same goods when the duty liability has already been discharged by the recipient under the applicable job work arrangement; a consequential penalty cannot survive without a valid duty demand.

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