Captive use exemption under excise law applies despite commercial invoicing when capital goods stay within the same factory.

Central excise duty was not payable on moulds, dies and fixtures manufactured and used captively within the same factory, because Notification No. 67/95-C.E. exempted capital goods so manufactured and used there, and ownership was not decisive. The Tribunal held that the notification did not require removal from the factory as a condition for exemption, and that issuance of commercial invoices alone did not create excise liability when the goods remained within the factory and were used in manufacture. Applying its earlier decision on identical facts, it sustained the exemption and rejected the duty demand.

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Issues: Whether central excise duty was payable on moulds, dies and fixtures manufactured and used captively within the factory when commercial invoices were raised but the goods were not removed from the factory, and whether exemption under Notification No. 67/95-C.E. dated 16.03.1995 was .

Analysis: The only substantive question was whether the raising of a commercial invoice could create duty liability despite the goods remaining within the same factory and being used in manufacture. The Tribunal followed its earlier decision in the appellant's own case and held that the notification exempts capital goods manufactured in a factory and used within that factory, without making ownership decisive. It further noted that the notification does not require removal from the factory as a condition for exemption and that mere invoicing does not by itself create excise liability. On identical facts, the issue was treated as already settled.

Conclusion: The assessee was entitled to the exemption, no duty was payable on the moulds, dies and fixtures, and the demand could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal succeeded.

Ratio Decidendi: Where capital goods are manufactured and used within the same factory, exemption cannot be denied merely because commercial invoices were issued, since excise liability depends on manufacture and statutory conditions of the notification, not on ownership or invoicing alone.

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