Change of opinion and revenue neutrality defeated the excise demand on transfer of capital goods.

A show cause notice issued on the same facts already disclosed to the excise department was held untenable because no fresh material had emerged and the notice reflected only a change of opinion. The Tribunal also accepted that the transfer of capital goods between units under the same management was revenue neutral, as duty paid by the first unit would have been available as credit to the receiving unit. On these twin grounds, the demand was found unsustainable and the assessee's appeal was allowed.

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Issues: Whether the show cause notice and consequent demand were sustainable when issued on the same set of facts already disclosed to the department, and whether the dispute was revenue neutral.

Analysis: The appellant had obtained prior permission from the excise authorities for transfer of capital goods after disclosure of the relevant facts. The Tribunal found that no new material had emerged after the original disclosures and that the notice was founded only on a change of opinion. It was also noted that both units were engaged in excisable manufacture under the same management, so any duty paid by the first unit on removal of the machinery would have been available as credit to the receiving unit, making the matter revenue neutral.

Conclusion: The show cause notice was held to be untenable and the demand was not sustainable. The appeal was allowed and the impugned order was set aside in favour of the assessee.

Final Conclusion: The Tribunal accepted the assessee's challenge to the demand on the twin grounds of absence of new facts and revenue neutrality, with consequential relief following as per law.

Ratio Decidendi: A demand founded only on a change of opinion, without fresh facts or evidence, and which is revenue neutral, is not sustainable.

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