Double duty on the same transformers is unsustainable where no legal basis distinguishes the two clearances.

Duty on transformers could not be recovered a second time where the same commodity had already suffered duty at a later stage of clearance through a sister concern. The Tribunal noted that the transformers fabricated by the appellants and those cleared by the sister concern were not shown to be different goods, and there was no sufficient basis to treat them as non-marketable at the appellants' stage. In the absence of a legally sustainable distinction between the two clearances, the demand amounted to impermissible double recovery and was set aside. The substantive duty demands were therefore unsustainable, while the remaining appeal was withdrawn.

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Issues: Whether duty could be recovered from the appellants again on transformers when duty had already been levied on the finished transformers at the stage of clearance by the sister concern, and whether the demand on the same goods was sustainable.

Analysis: The appellants fabricated transformers from materials supplied under an arrangement involving supervision and control by the customer. The Department's own orders showed that duty had been levied on the transformers again when they emerged from the sister concern in finished form. The Tribunal noted that the goods fabricated by the appellants and the goods cleared by the sister concern were not shown to be different commodities, and there was no sufficient material to conclude that the transformers were not already marketable as transformers when they left the appellants' premises. On the Department's case, the same commodity was being subjected to duty twice, once at the stage of removal from the appellants and again at the stage of clearance from the sister concern. In the absence of a clear basis to sustain such double recovery, the demand raised on the appellants could not stand.

Conclusion: The duty demands on the two orders relating to the same transformers were unsustainable and were set aside in favour of the appellants.

Final Conclusion: The appeals relating to the two duty demands succeeded, while the remaining appeal was withdrawn, so the matter ended with relief to the appellants on the substantive tax issue.

Ratio Decidendi: Where duty has already been levied on the same commodity at a later stage of clearance, the Department cannot again recover duty from an earlier stage on the same goods in the absence of a legally sustainable basis distinguishing the two clearances.

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