Job work duty demand cannot be raised on the wrong person when the job worker is treated as the manufacturer.

Duty liability in a job work clearance cannot be fastened on a person who is not shown to be the manufacturer of the goods on which demand is raised. Where the Revenue itself proceeds on the footing that the job worker undertook manufacture and that the clearance procedure was irregular, any demand, if otherwise sustainable, must be directed against the job worker and not against the assessee receiving the re-rolled products back. A merely incorrect exemption claim or technical procedural lapse does not by itself justify assessment of duty on the wrong person. The impugned duty demand on the assessee was therefore held unsustainable and the order was set aside.

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Issues: Whether the duty demand raised on the assessee in respect of re-rolled products cleared after job work was sustainable when the Revenue's own case was that the notification procedure under job work provisions was not correctly followed and the notice ought to have been issued to the job worker.

Analysis: The demand was founded on the view that the job work arrangement could not be covered under the cited notification and that the clearance pattern adopted by the assessee was not correct. However, the impugned demand was not directed against the entity which actually undertook the manufacturing process on job work basis. The goods on which duty was demanded were the re-rolled products received back from the job worker, whereas the assessee was not treated as the manufacturer of those products for the purpose of the demand. Once the Revenue proceeded on the basis that the job work clearance was irregular and that the job worker was the person undertaking manufacture, the duty liability, if any, had to be fastened on the job worker and not on the assessee. The demand could not be sustained merely because the assessee had claimed the wrong exemption notification or because the procedure was said to be technically incorrect.

Conclusion: The duty demand on the assessee was not sustainable and the impugned order was set aside.

Final Conclusion: The assessee succeeded because the demand was raised against the wrong person for the wrong goods, and the matter ended with consequential relief.

Ratio Decidendi: Where the Revenue alleges irregularity in a job work clearance and itself proceeds on the footing that the job worker is the manufacturer of the demanded goods, duty cannot be fastened on a person who is not shown to be the manufacturer of those goods.

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