CESTAT Tribunal: Overturns Duty Demand & Penalty for Job Worker's Record-Keeping

The Appellate Tribunal CESTAT, Mumbai overturned the duty demand and penalty imposed on a job worker for not maintaining records as required by Notifications No. 83/94 and 84/94. The Tribunal found that the job worker's submitted records matched the quantity manufactured and scrap generated, criticizing the department for not verifying supplier declarations or material transactions. As the job worker's records demonstrated proper accounting and there was no evidence of non-receipt by the supplier, the duty demand was deemed unjustified. The Tribunal allowed the appeal with consequential relief, setting aside the duty demand and penalty.

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Issues involved: Duty demand on job worker for not maintaining records as per Notifications No. 83/94 and 84/94.

Summary:
The Appellate Tribunal CESTAT, Mumbai heard the case where the appellant, a job worker, received copper scrap material for conversion into copper billets but did not file any declaration to the Central Excise authorities as required by Notifications No. 83/94 and 84/94. The adjudicating authority observed that the appellant failed to declare the jobwork activity and did not maintain records reflecting the receipt of goods and production of billets. The matter was previously remanded for the appellant to produce records. The appellant submitted delivery-cum-challans and a register showing material received and delivered, but the authority rejected these as only labor charges, confirming duty demand and imposing a penalty.

The appellant argued that the records submitted were valid and matched the quantity manufactured and scrap generated. The Tribunal noted that duty was demanded solely due to the lack of maintained records by the job worker. It criticized the department for not verifying if the supplier had filed the necessary declaration or confirming the material transactions. The appellant's records demonstrated proper accounting of received material and delivery to the supplier. As there was no evidence that the billets were not received by the supplier, the duty demand against the job worker was deemed unjustified. Consequently, the Tribunal set aside the duty demand and penalty, allowing the appeal with consequential relief.

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