2017 (5) TMI 607 - AT - Central Excise

Job-work - N/N. 214/86-CE dt.25.3.1986 - case of Revenue is that it is responsibility of the respondent to ensure that the principal manufacturer/supplier of the goods has compiled with the condition of the N/N. 214/86-CE and they have failed themselves to ensure the same - whether the respondent is liable to pay duty in terms of N/N. 214/86-CE or not? - Held that - the condition is cast on the supplier/principal manufacturer of the goods, that they have to file undertaking before the Assistant Commissioner or the Deputy Commissioner is having jurisdictional over the factory of the job worker. In the notification, it has been no where mentioned that the job worker is required to ensure to himself before doing job work that the principal manufacturer has filed required undertaking in terms of N/N. 214/86-CE - the principal manufacturer has filed undertaking and paid duty on the job work goods - condition of notification stands complied with - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Liability of the respondent to pay duty under Notification No.214/86-CE.

Analysis:

The judgment revolves around an appeal by the Revenue against the dropping of a demand by the adjudicating authority. The respondent, a job worker, received raw materials from the principal manufacturer under Notification No.214/86-CE and sent the finished goods back to the supplier under job work challan. The issue arose as the supplier did not file the required undertaking initially. The Revenue contended that the respondent should have ensured compliance by the principal manufacturer, citing relevant legal precedents. The respondent, on the other hand, defended the impugned order. The central question was whether the respondent was liable to pay duty under Notification No.214/86-CE.

The Tribunal analyzed the Notification No.214/86-CE, emphasizing that the responsibility to file the undertaking lay with the supplier/principal manufacturer, not the job worker. It was noted that nowhere in the notification was it stated that the job worker had to ensure the filing of the undertaking by the principal manufacturer. The Tribunal found that the Revenue's demand was unfounded as the principal manufacturer had indeed filed the undertaking and discharged the duty on the job work goods. Consequently, the Tribunal upheld the impugned order and dismissed the Revenue's appeal, ruling in favor of the respondent.

In conclusion, the judgment clarifies the distinction in responsibilities between the job worker and the principal manufacturer under Notification No.214/86-CE. The Tribunal's decision underscores that the duty to comply with the notification's conditions primarily rests with the supplier/principal manufacturer, absolving the job worker of such obligations.