Job work exemption under Notification No. 214/86 applies where finished goods are exported under bond and duty remains leviable.

Notification No. 214/86 remained available to a job worker where the principal manufacturer exported the finished goods under bond without payment of duty. Goods exported under bond are still regarded as dutiable for this purpose, because duty is leviable even though not actually paid due to export. As the principal manufacturers had furnished the required undertakings and the export-related certificates supported use of the inputs in manufacture of export goods, the notification conditions were satisfied. The Revenue's objection that non-payment of duty by the principal manufacturer defeated the exemption was rejected, and the benefit of the notification was held admissible to the job worker.

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Issues: Whether the job worker was entitled to the benefit of Notification No. 214/86 where the principal manufacturer had exported the finished goods under bond without payment of duty.

Analysis: The exemption under Notification No. 214/86 was examined in the context of job work undertaken on scrap supplied by the principal manufacturers. The crucial condition was whether the final products were goods on which duty was leviable in whole or in part. Goods exported under bond are not goods exempted from duty or chargeable to nil rate of duty; duty remains leviable but is not paid because of export. Since the principal manufacturers had filed the required undertakings and the goods were exported, the job-work arrangement satisfied the notification conditions. The prior orders and the verification of export-related certificates also supported that the inputs were used for manufacture of export goods.

Conclusion: The benefit of Notification No. 214/86 was admissible to the respondent, and the Revenue's objection based on non-payment of duty by the principal manufacturer failed.

Ratio Decidendi: Goods exported under bond remain dutiable for the purpose of Notification No. 214/86, and a job worker is not denied the exemption merely because duty is not actually paid due to export.

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