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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether Central Excise duty was payable on GPC/TGPC used by the appellant in electroplating crowns undertaken as job work for another principal manufacturer under Notification No. 214/86-CE.
Analysis: Notification No. 214/86-CE shifts the responsibility for duty payment from the job worker to the principal manufacturer who gets goods manufactured on job work basis. The conversion of standard gold into GPC/TGPC was undertaken under a back-to-back job work arrangement. A portion of the goods was used by the appellant in job work performed for the principal manufacturer, M/s. Titan Industries, whose final goods were to be used in the manufacture of watches and cleared on payment of duty. Since the notification's object was satisfied and there was no finding of diversion or non-accountal of GPC/TGPC, the demand against the appellant could not stand.
Conclusion: The duty demand on the GPC/TGPC used in the job work activity was not sustainable and the issue was decided in favour of the assessee.
Ratio Decidendi: Where goods are manufactured and used in a genuine back-to-back job work chain under Notification No. 214/86-CE, and the final products are cleared on payment of duty by the principal manufacturer, duty cannot be demanded from the intermediate job worker in the absence of diversion or non-accountal.
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