Job-work exemption under Notification No. 214/86-C.E. denied where mandatory undertaking and product coverage conditions were unmet.

Exemption under Notification No. 214/86-C.E. was unavailable for single ply spun yarn manufactured on job work basis because the principal manufacturer's undertaking was not furnished and the goods were not covered by the specified table in the notification. The record also showed that the relevant chapters for the goods, Chapters 54 and 55, were outside the listed goods in Column 2. As a result, the duty demand on the clearances of single ply yarn was correctly confirmed, including where the yarn was intended for doubling or multi-folded yarn manufacture.

---

---

Issues: Whether the single ply spun yarn manufactured on job work basis and cleared to the principal manufacturer for doubling was eligible for exemption under Notification No. 214/86-C.E. and, if not, whether duty was rightly demanded on the clearances.

Analysis: The exemption under Notification No. 214/86-C.E. applies only to goods specified in the relevant table and only where the principal manufacturer furnishes the requisite undertaking that the job-work goods will be used in the manufacture of final products and that duty on such final products will be discharged by him. No such undertaking was produced. Further, the goods manufactured by the appellant fell in Chapters 54 and 55, which were not covered by the goods listed in Column 2 of the notification. The record also showed no exemption from duty for single ply spun yarn manufactured and used for making doubled or multi-folded yarn during the relevant period.

Conclusion: The exemption was not available and the duty demand on the single ply yarn was correctly confirmed. The appeal failed.

Ratio Decidendi: Exemption under Notification No. 214/86-C.E. is unavailable unless the notification's conditions, including the principal manufacturer's undertaking and coverage of the goods in the specified table, are satisfied.

---