Duty on job-worker scrap cannot be demanded from the principal manufacturer absent a specific CENVAT rule.

Duty on waste and scrap generated at a job worker's premises could not be fastened on the principal manufacturer in the absence of a specific provision under the CENVAT Credit Rules, 2004. The Tribunal followed its earlier orders in the same assessee's case and held that non-return of the scrap did not create liability on the principal manufacturer. As the duty demand was unsustainable, the consequential levy of interest and penalty also failed. The impugned order was set aside and the appeal was allowed with consequential relief.

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Issues: Whether duty could be demanded from the principal manufacturer on waste and scrap generated at the job workers' premises and not returned to the principal manufacturer, and whether the consequential demand of interest and penalty could survive.

Analysis: The dispute was held to be covered by the Tribunal's earlier orders in the appellant's own case on the same factual and legal question. The reasoning accepted that the liability to pay duty on waste and scrap arising at the job workers' premises could not be fastened on the principal manufacturer in the absence of a governing provision under the CENVAT Credit Rules, 2004. The demand was therefore held unsustainable, and the related levy of interest and penalty also could not stand.

Conclusion: The duty demand on the scrap generated at the job workers' premises was not recoverable from the appellant, and the related penalty did not survive.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: In the absence of a specific rule making the principal manufacturer liable, duty on waste and scrap generated at a job worker's premises cannot be demanded from the principal manufacturer merely because the scrap was not returned.

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