Job-worker exemption under Notification 214/86-C.E. remains available despite sourcing some inputs independently.

Exemption under Notification No. 214/86-C.E. was held available to a job-worker even where it procured some raw materials for manufacture of the final product, because the notification required only that the goods be used by the principal manufacturer in further manufacture of dutiable products. No express bar existed against the job-worker sourcing some inputs independently. Prior authority was followed to the effect that use of minor procured materials did not defeat the exemption, and the benefit could not be denied merely because such materials were substantial by weight, since weight was not the governing test. The denial of exemption was therefore unsustainable.

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Issues: Whether exemption under Notification No. 214/86-C.E. was available where the job-worker procured some of the raw materials used in manufacture of the final product.

Analysis: The exemption applied so long as the goods manufactured by the job-worker were used by the person supplying the raw material in further manufacture of dutiable products. The notification did not contain any express bar against the job-worker procuring some materials on its own. The Tribunal also relied on prior authority holding that use of minor materials procured by the job-worker would not by itself defeat the exemption. The Court further rejected the contention that eligibility could be denied merely because the procured materials were substantial by weight, since that was not the governing test under the notification.

Conclusion: The exemption was available to the assessee and the denial of benefit was unsustainable.

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