Duty-paid status and job-work liability in copper goods exemption turn on nil-duty clearances and actual manufacture.

Copper waste and scrap cleared under exemption or nil-duty gate passes may be treated as duty-paid for exemption purposes when the notification requires inputs on which excise duty has already been paid, so the objection that such scrap was non-duty-paid does not survive. In a genuine job-work arrangement, duty on copper bars and rods remains payable by the person who actually manufactures the excisable goods, unless the job worker is shown to be a mere dummy acting under the principal's supervision, direction, and control. On the stated facts, the demand could not be fastened on the appellant and would lie, if at all, against the job worker.

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Issues: (i) whether copper waste and scrap cleared under exemption could be treated as duty-paid for the purpose of the exemption notification applicable to copper bars and rods; (ii) whether duty on the copper bars and rods was payable by the appellant or by the job worker who re-rolled the ingots.

Issue (i): whether copper waste and scrap cleared under exemption could be treated as duty-paid for the purpose of the exemption notification applicable to copper bars and rods

Analysis: The condition in the notification requiring that the goods be made from copper and products on which excise duty had already been paid was satisfied because goods cleared under nil-duty or exemption gate passes are deemed to have suffered appropriate duty. The earlier objection that the scrap was recognisable as non-duty-paid therefore could not survive.

Conclusion: The appellant was entitled to the benefit of the exemption notification on this ground.

Issue (ii): whether duty on the copper bars and rods was payable by the appellant or by the job worker who re-rolled the ingots

Analysis: In the absence of any finding that the job worker acted under the supervision, direction, and control of the appellant or was merely a dummy, the job worker remained the manufacturer for excise purposes. On those facts, the duty demand could not be fastened on the appellant.

Conclusion: The duty demand against the appellant was unsustainable and lay, if at all, against the job worker.

Final Conclusion: The demand was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: Goods cleared under exemption or nil-duty gate passes may be treated as duty-paid for exemption purposes, and in a genuine job-work arrangement the person actually manufacturing the excisable goods is liable to duty unless the job worker is shown to be a mere dummy under the control of the principal.

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