Job-work exemption under concessional duty notification survives where the prescribed procedure is optional, not mandatory.

Goods manufactured on a job-work basis remained eligible for the concessional duty rate under the relevant exemption notification. The Tribunal treated the procedure in the earlier notification as optional rather than mandatory, so the principal manufacturer's failure to follow that procedure did not defeat the exemption claim. In the absence of that optional election, the job worker, or the person to whom the goods were supplied, was to be treated as the manufacturer for exemption purposes. The assessee therefore retained the concessional benefit, and the duty demand was not restored.

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Issues: Whether the assessee, manufacturing goods on job-work basis, was entitled to the concessional rate of duty under the notification, and whether the procedure prescribed under the earlier notification was mandatory so as to deny the benefit.

Analysis: The goods were manufactured on job-work basis for parties supplying the material. The dispute turned on whether the procedure under the earlier notification had to be compulsorily followed by the principal manufacturer before the job worker could avail the concession. The Tribunal held that the procedure under that notification was only optional. In the absence of exercise of that option, the job worker or the person to whom the goods were supplied was to be treated as the manufacturer for the purpose of the exemption benefit.

Conclusion: The assessee was entitled to the concessional rate of duty, and the revenue's challenge failed.

Final Conclusion: The order allowing the assessee's appeal was sustained and the duty demand was not restored.

Ratio Decidendi: Where a notification prescribes an optional procedure for treating the principal manufacturer as the manufacturer in job-work clearances, non-compliance with that optional procedure does not by itself defeat the concessional benefit otherwise available to the job worker.

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