Optional nature of Notification No. 214/86-CE allows duty-paid job-work clearances, with credit available to the principal manufacturer.

Notification No. 214/86-CE is optional and does not compel a job worker to claim exemption; a job worker may validly clear intermediate goods on payment of excise duty. Because the invoices showed duty was actually paid and the notification's conditions were not availed, the principal manufacturer was entitled to credit of that duty. The demand for reversal was therefore unsustainable.

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Issues: Whether credit of duty paid by the job worker was admissible when the job worker had not availed the benefit of Notification No. 214/86-CE and had paid duty on the job-worked goods.

Analysis: The duty-paying invoices showed that the job worker had cleared the intermediate product on payment of excise duty. The absence of an undertaking fulfilling the conditions of Notification No. 214/86-CE supported the position that the notification had not been availed. Section 5A(1A) of the Central Excise Act, 1944 was relied upon to recognise that a job worker cannot be compelled to take exemption. The notification was treated as providing an option to shift duty liability, not as mandatorily denying duty payment by the job worker. Since the duty was actually paid, the principal manufacturer was entitled to avail credit.

Conclusion: The credit was admissible and the demand for reversal was unsustainable.

Ratio Decidendi: Notification No. 214/86-CE is optional in nature and does not prevent a job worker from paying duty; where duty is validly paid, the principal manufacturer may take credit of that duty.

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