Job work exemption under Notification 214/86-C.E. does not apply to fully exempt final goods, with duty liability not fastened on the principal manufacturer.

Notification No. 214/86-C.E. dated 25-3-86 applies only where the finished goods are leviable to duty, wholly or partly. As the railway wagons manufactured here were fully exempt, the notification had no application. Duty could not be fastened on the appellants for goods processed by job workers because the appellants had not manufactured those goods; if any demand was otherwise sustainable, it would lie against the job workers, who were not before the Tribunal.

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Issues: Whether Notification No. 214/86-C.E. dated 25-3-86 applied to clearances sent for job work and whether the appellants could be made liable to pay duty on the processed goods returned by the job workers for use in manufacturing fully exempted railway wagons.

Analysis: The exemption notification was held to apply only where the finished goods are leviable to duty, either wholly or partly. The finished product in this case was fully exempt from duty, so the notification had no application. The duty demand could not be fastened on the appellants in respect of goods processed by job workers, since the appellants had not manufactured those goods. Even if the processed goods were regarded as excisable, any demand had to be raised against the job workers, who were not before the Tribunal.

Conclusion: Notification No. 214/86-C.E. dated 25-3-86 was held inapplicable, and the appellants were not liable to pay duty on the impugned goods processed by the job workers.

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