Job-work exemption under Notification 214/86-C.E. is not lost because the worker uses only consumables and minor ancillary materials.

Notification No. 214/86-C.E. was discussed in the context of job-work clearances where the principal manufacturer supplied the main raw materials, while the job worker used consumables and minor ancillary items from its own source. The text explains that such items, including grinding wheels, gases, nuts, bolts and paints, did not constitute the raw materials giving the finished product its essential character. On that basis, the notification's conditions were treated as satisfied, and the clearances remained eligible for exemption where the principal manufacturer had obtained the required permission.

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Issues: Whether a job worker was entitled to the benefit of Notification No. 214/86-C.E. when the principal manufacturer supplied the main raw materials but the job worker also used certain consumables and minor materials from its own source in the manufacture of the final product.

Analysis: The principal manufacturer had obtained the requisite permission under the notification and had supplied the plates and pipes which constituted the raw materials necessary for manufacture of the air-heater block assembly. The materials sourced by the job worker, such as grinding wheels, oxygen and acetylene gases, nuts, bolts and paints, were largely consumables or ancillary items and did not constitute the raw materials that gave the product its essential character. The earlier remand direction had also proceeded on the basis that use of some materials from the job worker's own source did not by itself defeat the notification, and the relevant test was whether such materials were of the kind contemplated as raw materials under the notification.

Conclusion: The job worker's use of its own consumables and minor materials did not disqualify the clearances from exemption under Notification No. 214/86-C.E.; the benefit of the notification was available to the assessee.

Final Conclusion: The impugned orders were set aside and the appeals succeeded, with consequential relief to the assessee.

Ratio Decidendi: A job worker does not lose the benefit of an exemption notification merely because it uses consumables or minor ancillary materials from its own source, so long as the principal manufacturer supplies the raw materials that confer the essential character of the finished product and the notification's conditions are otherwise satisfied.

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