Exemption notification and job-work credit: prima facie case found for waiver of pre-deposit and stay of recovery.

Notification No. 214/86 was treated as an exemption mechanism that shifts the time of duty payment and permits the principal manufacturer to discharge duty instead of the job worker. In the interim stay context, the assessee's credit on inputs and the job worker's duty payment were both found to have gone to the Government account, so the allegation of double benefit was not sustainable at that stage. A prima facie case was therefore made out, justifying waiver of pre-deposit and stay of recovery.

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Issues: Whether, for the purposes of stay, the assessee had made out a prima facie case against the demand arising from credit taken on duty paid by the job worker under Notification No. 214/86 dated 24-3-1986.

Analysis: The assessee had taken credit of duty paid on the inputs procured by it, and the job worker had also paid duty on the processed goods. Notification No. 214/86, being an exemption notification, was treated as shifting the time of payment and permitting the principal manufacturer to pay duty instead of the job worker. Since the duty on the inputs and the duty paid by the job worker had both gone to the Government account, the finding that the assessee had obtained a double benefit was not found sustainable at the interim stage.

Conclusion: A prima facie case was made out, warranting waiver of pre-deposit and stay of recovery.

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