Job-work duty liability on processed fabrics rejected where goods were returned to the principal manufacturer after treatment.

Processed fabrics received by a job worker under Rule 57F(4) and returned to the principal manufacturer after heat setting and stentering were held not liable to duty in the hands of the job worker. The Tribunal treated the issue as identical to an earlier majority decision that had accepted the assessee's position on the same job-work arrangement. Following that ratio, it found no reason to depart from the earlier view and negatived duty liability on the returned processed fabrics.

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Issues: Whether processed fabrics received by a job worker under Rule 57F(4) and returned to the principal manufacturer after heat setting and stentering were liable to duty at the hands of the job worker.

Analysis: The issue was treated as identical to an earlier Tribunal decision in which the question had been resolved by the majority view in favour of the assessee. That majority view held that no duty was required to be paid by the job worker when sending the processed fabrics back to the principal manufacturer under the relevant job-work arrangement. Following that ratio, the Tribunal found no reason to differ from the earlier decision.

Conclusion: The liability to pay duty on the processed fabrics at the hands of the job worker was negatived and the issue was decided in favour of the assessee.

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