Textile job work duty liability rests with the principal manufacturer unless the job worker opts in.

Rule 12B of the Central Excise Rules, 1994 created a special procedure for textile and textile articles made on job work, under which duty liability, accountability and procedural compliance ordinarily rested with the person who got the goods manufactured on his account. The job worker could choose to assume registration and discharge duty himself, but if that option was not exercised, the statutory burden remained with the principal manufacturer. The Board circular was consistent with this arrangement, stating that a job worker was free from duty and compliance obligations unless he opted in. On the admitted facts, the textile job worker had not made that election and was therefore not liable for excise duty.

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Issues: Whether a textile job worker was liable to discharge central excise duty under Rule 12B of the Central Excise Rules, 1994, where the goods were manufactured on job work basis for merchant manufacturers.

Analysis: The dispute turned on the special procedure introduced for textile and textile articles. Rule 12B and the corresponding notification placed the duty liability, accountability, and procedural compliance on the person who got the goods manufactured on his account on job work basis. The job worker could, at his option, assume registration and duty compliance, but absent such option the statutory responsibility remained with the principal manufacturer. The Board circular also clarified that the job worker would be free from duty burden and procedural requirements unless he opted to undertake them. The admitted facts showed that the appellant acted only as a job worker and had not exercised the statutory option to discharge duty himself.

Conclusion: The appellant, being a textile job worker who had not opted to undertake duty compliance, was not liable to pay excise duty; the demand and impugned order were unsustainable.

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