Job-worker duty demand fails where materials were supplied under prescribed procedure and declaration delay caused no revenue prejudice.

Duty and penalty on a job worker were held unsustainable where corrugated carriers were manufactured from raw materials supplied by the principal under Rule 57F(3), and the only objection was that the principal's declaration under Notification No. 214/86-C.E. was filed belatedly. The Court noted that the principal remained liable for duty on goods cleared to it, with corresponding credit available if duty was paid, and that any non-levy would not prejudice revenue. On that basis, the demand raised against the job worker could not stand, and the Tribunal's order was upheld.

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Issues: Whether duty and penalty could be sustained against the job worker when the raw materials were supplied under the prescribed procedure but the declaration under Notification No. 214/86-C.E. was filed belatedly.

Analysis: The respondent manufactured corrugated carriers on job work basis from raw materials supplied by the awarder under the procedure indicated in Rule 57F(3). The only basis for demanding duty from the respondent was the delay in filing the declaration by the awarder under Notification No. 214/86-C.E. The Court noted that the awarder remained liable for duty on the goods cleared to it and that any duty paid would entitle it to credit, while non-levy would not prejudice the revenue.

Conclusion: The demand of duty and penalty on the respondent was not sustainable and the Tribunal's order was upheld.

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