Job work waste and scrap liability: principal manufacturer not liable absent a specific excise provision.

In a job work arrangement under Notification No. 214/86-CE, waste and scrap generated at the job worker's factory did not fasten central excise duty liability on the principal manufacturer. The Tribunal treated the issue as no longer res integra, relying on the appellant's earlier cases and the more liberal wording of Rule 4(5)(a) of the Cenvat Credit Rules, 2004. It distinguished the earlier Rule 57F(3) position and held that, absent a specific statutory provision imposing such liability, the principal manufacturer could not be made liable for duty on waste and scrap cleared by the job worker without payment of duty.

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Issues: Whether the principal manufacturer is liable to pay central excise duty on waste and scrap arising at the job worker's factory and cleared by the job worker without payment of duty in a job work arrangement under Notification No. 214/86-CE.

Analysis: The dispute concerned duty liability on waste and scrap generated during job work. The Tribunal noted that the issue had already been settled in the appellant's own earlier cases and that the relevant credit rule did not impose liability on the principal manufacturer for waste and scrap generated at the job worker's premises. The reasoning proceeded on the basis that the earlier rule position under Rule 57F(3) of the Central Excise Rules was different, while Rule 4(5)(a) of the Cenvat Credit Rules, 2004 was more liberal and did not create such liability. The issue was therefore treated as no longer res integra.

Conclusion: The principal manufacturer is not liable to pay duty on waste and scrap generated at the job worker's factory in the facts considered, and the demand could not be sustained.

Ratio Decidendi: In a job work arrangement, absent a specific statutory provision imposing such liability, waste and scrap generated at the job worker's end do not fasten excise duty liability on the principal manufacturer.

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