Rule 57F(3) job-worker clearances on duty payment barred double duty demand and penalty.

Rule 57F(3), as amended from 16-3-1995, allowed a job worker to clear goods for home consumption on payment of duty. Where the job worker had already paid duty on the inputs processed under that rule, it was not justified to insist that the goods must first be received back in the assessee's factory and that duty be paid again by the assessee. On that basis, the duty demand and penalty were held unsustainable, and the appeal succeeded for the assessee.

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Issues: Whether duty could be demanded from the assessee when the inputs sent to the job worker under Rule 57F(3) were cleared by the job worker for home consumption on payment of duty after the amendment introduced by Notification No. 11/95-C.E.(N.T.), dated 16-3-1995.

Analysis: Rule 57F(3), as amended with effect from 16-3-1995, permitted the job worker to clear the goods for home consumption on payment of duty. The duty on the goods in question had in fact been paid by the job worker. In these circumstances, insisting that the goods must be received back in the assessee's factory and that duty must again be paid by the assessee was not justified.

Conclusion: The duty demand and penalty were not sustainable; the appeal was allowed in favour of the assessee.

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