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Issues: (i) Whether the demand of duty, penalty and confiscation could be sustained on the allegation that 1022 gas compressors obtained under Chapter X procedure were diverted and not used in the manufacture of water coolers; (ii) Whether the clearances of the related proprietary units could be clubbed with the assessee's clearances.
Issue (i): Whether the demand of duty, penalty and confiscation could be sustained on the allegation that 1022 gas compressors obtained under Chapter X procedure were diverted and not used in the manufacture of water coolers.
Analysis: The same allegation, based on the same investigation, statements and the same quantity of compressors, had already been examined in the earlier round of proceedings. The Tribunal's majority view on that dispute was subsequently set aside by the Delhi High Court, which held the evidence insufficient to sustain the allegation of diversion and clandestine removal. As the present demand rested on the very same factual foundation, there was no basis to re-adjudicate the evidentiary sufficiency differently.
Conclusion: The demand of duty, penalty and confiscation could not be sustained and were set aside in favour of the assessee.
Issue (ii): Whether the clearances of the related proprietary units could be clubbed with the assessee's clearances.
Analysis: The question of clubbing had already been decided in the assessee's favour in earlier proceedings arising from the same set of facts, and the Revenue's challenge to that finding had also been dismissed. In the absence of any fresh legal basis to disturb that concluded position, the Commissioner's decision dropping the clubbing allegation required no interference.
Conclusion: The clubbing of clearances was not permissible and the Revenue's challenge failed.
Final Conclusion: The assessee obtained complete relief against the duty demand, penalty and confiscation, while the Revenue's challenge to the finding on clubbing of clearances was rejected.
Ratio Decidendi: Where the same allegation on identical facts has already been finally negatived by the competent court, a subsequent demand based on that very material cannot be sustained, and a concluded finding in favour of the assessee on clubbing of clearances cannot be reopened in the absence of any new basis.
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