Job work duty demand and extended limitation fail where movements are documented, liability rests with the principal manufacturer, and the transaction is revenue neutral.

In a documented job work arrangement involving yarn moved under authenticated challans and permissions, the article states that duty liability would rest with the principal manufacturer rather than the job worker under the exemption scheme. It further notes that the transaction was revenue neutral because any duty paid by the job worker would be available as credit to the manufacturer. On these facts, no suppression of facts or mala fide intent could be attributed, so the extended period of limitation was not available and the demand against the job worker was unsustainable.

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Issues: Whether the demand against the job worker was barred by limitation and whether the extended period could be invoked on the alleged suppression of facts, particularly when the goods moved under authenticated documents and the transaction was revenue neutral.

Analysis: The duty demand arose from job work done on yarn received under authenticated challans, and the material on record showed that the movement of goods was with due documentation and permission. The reasoning of the lower appellate authority that, in a job work arrangement under the exemption scheme, any duty liability would lie with the principal manufacturer and not the job worker was not effectively rebutted. The circular relied upon by the lower authority also supported the position that duty in such cases is to be discharged by the manufacturer. On these facts, no mala fide intent or suppression could be attributed to the respondent, and the transaction was revenue neutral because any duty paid by the job worker would have been available as credit to the manufacturer.

Conclusion: The extended period of limitation was not invocable, the demand against the job worker was unsustainable, and the revenue appeal failed.

Ratio Decidendi: In a documented job work transaction, where the movement of goods is authenticated and the duty effect is revenue neutral, the extended period cannot be invoked absent suppression or mala fide intent, and the demand is not sustainable against the job worker when liability lies on the principal manufacturer.

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