Revenue neutrality in Cenvat credit disputes requires factual scrutiny before denial on job-work transactions.

Cenvat credit denial concerning inputs sent to job workers was required to be re-examined because the lower authorities had not considered the assessee's plea of revenue neutrality. The Tribunal noted that revenue neutrality is fact-dependent and turns on the actual job-work arrangement and credit flow, so the record needed proper scrutiny before any final view could be taken. The matter was therefore remanded for fresh adjudication after considering the appellant's submissions and the plea of revenue neutrality.

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Issues: Whether the demand of Cenvat credit required reconsideration in the light of the plea of revenue neutrality arising from removal of inputs to job workers under the job-work procedure.

Analysis: The dispute concerned inputs sent under job-work challans and the consequent denial of credit on the footing that the inputs were not reversed when sent to the job worker. The Tribunal noted that the lower authorities had not examined the plea of revenue neutrality. Since revenue neutrality depends on the facts of each case and the record required proper scrutiny of the job-work arrangement and the credit flow, the issue was not fit for final adjudication at that stage.

Conclusion: The matter was remanded to the Adjudicating Authority for fresh decision after considering the appellant's submissions and the plea of revenue neutrality.

Ratio Decidendi: Where the plea of revenue neutrality is fact-dependent and has not been examined by the lower authorities, the dispute should be reconsidered on remand after a proper factual inquiry into the job-work and credit arrangement.

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