Job worker exemption under Notification 214/86-CE upheld, and extended limitation denied where departmental knowledge was established.
A job worker clearing goods under Notification No. 214/86-CE was held entitled to duty exemption where the principal manufacturer had filed the prescribed undertaking and the Revenue had accepted it. The benefit could not be denied merely because the principal manufacturer's final product was exempt, and the duty demand failed on merits. On limitation, the extended period was held unavailable because the activity and the claim under the notification were within the Revenue's knowledge. The impugned orders were set aside and consequential relief followed.
Issues: (i) Whether the appellant, as a job worker, was entitled to clear the goods without payment of duty under Notification No. 214/86-CE when the principal manufacturer had filed the prescribed undertaking. (ii) Whether the extended period of limitation could be invoked for the show cause notices.
Issue (i): Whether the appellant, as a job worker, was entitled to clear the goods without payment of duty under Notification No. 214/86-CE when the principal manufacturer had filed the prescribed undertaking.
Analysis: The undertaking filed by the principal manufacturer in terms of Notification No. 214/86-CE had been accepted by the Revenue. On that basis, the appellant cleared the goods as a job worker and the departmental proceedings were not required to be initiated against it. The exemption benefit could not be denied merely because the principal manufacturer's final product was exempt. The demand was therefore not sustainable on merits.
Conclusion: The appellant was entitled to the benefit of Notification No. 214/86-CE and the duty demand on merits failed.
Issue (ii): Whether the extended period of limitation could be invoked for the show cause notices.
Analysis: The activity of the appellant was within the knowledge of the Revenue and the option under Notification No. 214/86-CE had been claimed on the strength of the undertaking filed by the principal manufacturer. In such circumstances, the extended period of limitation was not available to the department.
Conclusion: The extended period of limitation was not invokable.
Final Conclusion: The impugned orders were unsustainable, and the appeals succeeded with consequential relief.
Ratio Decidendi: Where the principal manufacturer has filed and the Revenue has accepted the undertaking required under Notification No. 214/86-CE, the job worker cannot be denied the notification benefit, and the extended period of limitation is unavailable when the relevant facts were within departmental knowledge.
TaxTMI 
AI Drafter ✕
TaxTMI 
