Job work records and supplier verification defeated the duty demand and penalty under the exemption notifications.

Duty and penalty on a job worker for alleged non-compliance with Notifications No. 83/94-C.E. and 84/94-C.E. were not sustainable where the demand rested only on claimed failure to maintain prescribed records. The assessee's delivery-cum-challans and register showing receipt of scrap, manufacture of billets, and return of finished goods were treated as sufficient evidence that the material was accounted for and labour charges were recorded. In the absence of any verification at the supplier's end or evidence that the billets made from the supplied raw material were not received back by the supplier, the demand could not be upheld, and the levy was set aside.

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Issues: Whether duty and penalty were leviable on the job worker for alleged non-compliance with Notifications No. 83/94-C.E. and 84/94-C.E. on the ground that prescribed records and declarations were not maintained.

Analysis: The demand was founded only on the allegation that the job worker had not maintained the records required for job work under the notifications. The records produced by the appellant, including delivery-cum-challans and the register showing receipt of scrap, manufacture of billets, and return of the finished goods, were found sufficient to show that the material received was duly accounted for and the labour charges were recorded. No enquiry was made at the supplier's end to verify whether the necessary declaration had been filed or whether the raw material and finished billets had actually moved between the parties. In the absence of evidence that the billets manufactured from the supplied raw material were not received by the supplier, the demand could not be sustained.

Conclusion: The duty demand and penalty were not sustainable and were set aside in favour of the assessee.

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