Revenue-neutral sister-unit clearances negate differential excise duty where the recipient can take full Cenvat credit.

Differential central excise duty on goods cleared to a sister unit was not payable where any duty paid by the manufacturing unit was fully available as Cenvat credit to the recipient unit. The clearances were therefore revenue-neutral, and the Revenue did not dispute that the issue and facts matched those addressed in earlier periodical show-cause notices. Consequently, no differential duty or consequential interest arose on the sister-unit transactions.

---

---

Issues: Whether differential central excise duty was payable on goods cleared to a sister unit when the corresponding duty was available as Cenvat credit to that unit.

Analysis: The identical issue arising from periodical show-cause notices had already been decided on the basis that clearances to the sister unit resulted in a revenue-neutral situation, since any duty paid by the manufacturing unit was available as Cenvat credit to the recipient sister unit. The Revenue did not dispute the identity of the issue or facts.

Conclusion: No differential duty or consequential interest was payable in the revenue-neutral transaction. The issue was decided in favour of the assessee.

---