Job-work clearances under Notification 214/1986 could not be independently assessed once the principal manufacturer's undertaking was accepted.

Where a principal manufacturer furnished an undertaking under Notification No. 214/1986 to discharge Central Excise duty on job-work clearances, and the Revenue accepted that arrangement with goods moving under job-work challans, the jurisdictional Assistant Commissioner had no authority to independently assess the appellant's activity. The Tribunal therefore held that the demand and penalty could not be sustained, and the impugned orders were set aside.

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Issues: Whether, in view of the undertaking furnished by the principal manufacturer under Notification No. 214/1986 dated 25.03.1986 and acceptance of the job-work clearances, the jurisdictional Central Excise authority had authority to independently assess the appellant's activity and sustain the impugned demand and penalty.

Analysis: The principal manufacturer had given an undertaking under Notification No. 214/1986 to discharge Central Excise duty arising from the job work undertaken by the appellant. The record showed that this undertaking had been accepted by the Revenue and the goods were received under job-work challans. In those circumstances, the Tribunal held that the jurisdictional Assistant Commissioner did not have authority to make an independent assessment of the appellant's activity.

Conclusion: The demand and penalty could not be sustained and both impugned orders were set aside in favour of the appellant.

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