Captive moulds exemption under Notification 67/95-CE continued after factory shifting; transfer to own unit was revenue neutral.

Moulds manufactured for captive use remained covered by Notification No. 67/95-CE when they were transferred to the same manufacturer's Noida unit after closure and shifting of the original factory. The movement was treated as a continuation of the same manufacturing activity, not a clearance out of the factory in the sense contemplated by the notification, so the exemption condition was not breached. The duty demand was also considered unsustainable because any duty paid would have been available as CENVAT credit to the recipient unit, making the transaction revenue neutral.

---

---

Issues: Whether moulds manufactured and used within the factory remained exempt under Notification No. 67/95-CE dated 16.03.1995 when they were transferred to the assessee's own unit at Noida on closure and shifting of the original factory, and whether duty could be demanded on such transfer despite the availability of CENVAT credit and the revenue-neutral nature of the transaction.

Analysis: The moulds were manufactured for use within the factory and continued to be used after the original unit was closed and the entire manufacturing setup was shifted to the Noida unit. The transfer was part of the movement and merger of the same manufacturing activity, not a clearance of the moulds out of the factory in the sense contemplated by the notification. The duty demand was also held to serve no useful purpose because, if paid, the duty would be available as credit to the recipient unit of the same manufacturer, making the exercise revenue neutral.

Conclusion: The condition of the notification was not violated, and the demand of duty on transfer to the assessee's own Noida unit was unsustainable.

---