Job work exemption under Notification No. 214/86-C.E. applies when the principal manufacturer files the undertaking and pays duty.

Notification No. 214/86-C.E. applies to goods manufactured on job work basis where the principal manufacturer furnishes the prescribed undertaking to the jurisdictional authority and discharges duty on the final products. The record showed that intimation was given to the competent excise authority, with a copy to the authority over the job worker's factory, and the job worker's classification declaration reflected manufacture under the notification. As the department did not dispute that duty had been paid by the principal manufacturer, the notification conditions were treated as satisfied and the exemption was available to the job worker. On that basis, the duty demand and penalty could not be sustained.

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Issues: Whether the benefit of Notification No. 214/86-C.E. was available to goods manufactured on job work basis, where the principal manufacturer had given an undertaking and the duty on the final products had been discharged by the principal manufacturer.

Analysis: Notification No. 214/86-C.E. exempts goods manufactured in a job worker's factory and permits clearance for home consumption on payment of duty by the supplier of raw material, provided the prescribed undertaking is furnished to the jurisdictional authority. The record showed that the principal manufacturer had sent intimation to the competent Central Excise authority, with a copy to the authority having jurisdiction over the job worker's factory, stating that the goods would be manufactured on job work basis and that duty liability would be discharged by the principal manufacturer. The classification declaration filed by the job worker also reflected manufacture on job work basis under the notification. The department did not dispute that duty had in fact been discharged by the principal manufacturer.

Conclusion: The condition for availment of the notification was satisfied and the benefit of Notification No. 214/86-C.E. was available to the goods manufactured and cleared by the job worker.

Final Conclusion: The duty demand and penalty could not be sustained, and the appeal succeeded.

Ratio Decidendi: Where the principal manufacturer furnishes the prescribed undertaking to the jurisdictional authority and discharges the duty on the final products, the job worker is entitled to the exemption under Notification No. 214/86-C.E. for goods manufactured on job work basis.

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