Trader not liable for job-worker's excise duty shortfall absent express statutory recovery provision

Excise duty short-paid by a job worker could not be recovered from a trader where the trader was not the manufacturer and no express statutory machinery made the trader liable. The notification relied upon only exempted traders from registration in specified job-work situations; it did not create a substantive duty liability on the trader. The applicable recovery mechanism referred to under the Customs Act had not been carried into the Central Excise framework, so the trader could not be saddled with the duty burden. The demand against the trader was therefore not sustainable.

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Issues: Whether duty short-paid by the job worker could be fastened on the trader and recovered from the trader's deposit in the absence of any statutory machinery making the trader liable.

Analysis: The notification relied upon only exempted traders from registration in specified job-work situations and did not create a substantive liability on the trader to pay duty on goods processed by the job worker. The controlling principle applied was that duty liability attaches to the manufacturer, and a trader who does not answer that description cannot be proceeded against for the duty short-paid by the processing unit. The reference to the Customs Act mechanism was also noted, but the relevant provision enabling such recovery had not been carried into the Central Excise framework; in its absence, the trader could not be saddled with the duty burden.

Conclusion: The duty demand could not be sustained against the trader and the appeal failed.

Final Conclusion: The adjudication affirmed that, on the facts and statutory framework then applicable, a trader could not be made answerable for the excise duty short-paid by the job worker, and the order relieving the trader of duty liability was maintained.

Ratio Decidendi: In the absence of an express statutory provision creating such liability, excise duty on job-worked goods cannot be fastened on a trader who is not the manufacturer.

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