Job-work exemption under Notification 214/86 fails where the final product attracts nil excise duty.

Notification No. 214/86 exemption for job-work goods applies only when the finished product is one on which excise duty is leviable, in whole or in part. A nil rate of duty is not equivalent to duty being leviable, so goods used in making pesticides attracting nil duty did not satisfy the notification's condition. The benefit of the exemption was therefore unavailable, and the duty demand was sustained.

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Issues: Whether CMB Acid Chloride manufactured on job work basis qualified for exemption under Notification No. 214/86 when the final product, pesticides, attracted nil rate of duty.

Analysis: The notification exempts goods manufactured on job work basis only where they are used in the manufacture of a final product on which duty of excise is leviable whether in whole or in part. The expression used in the notification indicates that the final product must attract some excise duty and that nil rate of duty cannot be equated with duty leviable. Since the product was used in the manufacture of pesticides falling under sub-heading 3808.10 and attracting nil duty, the condition of the notification was not satisfied.

Conclusion: The benefit of Notification No. 214/86 was not available and the duty demand was rightly confirmed.

Ratio Decidendi: Where an exemption notification requires the final product to be one on which duty is leviable in whole or in part, a product attracting nil rate of duty does not satisfy that condition.

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