Job work exemption under excise law does not depend on raw material ownership, and shifting grounds cannot sustain demand.

Notification No. 67/95 exemption was not conditioned on the job worker owning the raw material, so calcined bauxite processed on job work basis remained eligible for relief. The notice's original ground of absence of ownership could not be substituted at adjudication with a different basis. Reasoning drawn from Notification No. 214/86 was inapplicable on the facts, and the raw bauxite was noted as not duty-liable in the stated circumstances. On that footing, no revenue loss was shown and the proposed demand and penalties were not sustainable.

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Issues: Whether calcined bauxite processed by a job worker was eligible for exemption notwithstanding that the job worker did not own the raw material, and whether the demand and penalty could be sustained on the basis of an arrangement between the supplier and the job worker.

Analysis: The exemption under Notification No. 67/95 was held not to require ownership of the raw material by the job worker. The reason originally relied upon in the notice, namely absence of ownership, could not be replaced by a different basis at the adjudication stage. The arrangement was found to be within the scope of excise law, and the reasoning under Notification No. 214/86 was held inapplicable on the facts. It was further observed that the raw bauxite was itself not liable to duty in the circumstances referred to, and that no revenue loss had resulted from the process adopted.

Conclusion: The exemption was available to the job worker, and the demand and penalties could not be sustained.

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