Job worker penalty cannot follow trader's misdeclaration absent proof of suppression or intent to evade duty.

A job worker cannot be penalised under Central Excise law for undervaluation or misdeclaration made by the trader supplying grey fabrics, absent proof of suppression or intent to evade duty by the job worker. The Tribunal found no evidence that the processor had misdeclared the value, noted that the lesser declaration was attributable to the trader, and observed that differential duty was paid once the correct price was known. On that basis, the penal consequence could not be fastened on the job worker for another party's incorrect declaration, and the penalty was held unsustainable.

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Issues: Whether the job worker could be subjected to penalty under the Central Excise law for alleged undervaluation or misdeclaration made by the trader supplying the grey fabrics, and whether the penalty imposed under the penal provisions was sustainable.

Analysis: The Tribunal noted that the Department had not shown suppression or misdeclaration by the job worker in respect of the value of the grey fabrics. The lesser declaration, if any, was made by the trader, and the job worker could not be penalised for the trader's act. It was also noticed that once the assessee came to know of the actual price, the differential duty was paid. In these circumstances, the Tribunal followed its earlier view that the penal consequence could not be fastened on the processor for the trader's wrong declaration.

Conclusion: The penalty on the job worker was not justified and the Revenue's challenge to the order setting aside the penalty failed.

Final Conclusion: The appeal was rejected, and the order deleting the penalties was left undisturbed.

Ratio Decidendi: A job worker cannot be penalised for undervaluation or misdeclaration committed by the trader supplying the goods, absent proof of suppression or intent to evade duty on the job worker's part.

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