Excise duty on job-worked fabrics cannot be shifted to the supplier merely by a declaration under the notification.

Excise duty liability under the job-work arrangement remained with the manufacturer or producer of the excisable goods, not with a supplier of grey fabrics who merely sent material for processing. A declaration under Notification 305/77 regulated the movement of goods to a job worker, but it did not by itself confer manufacturer status on the supplier or shift the duty burden to him. On that reasoning, the demand against the supplier could not be sustained.

---

---

Issues: Whether duty could be demanded from the supplier of grey fabrics who merely sent the goods to a processor/job worker and had signed the declaration under Notification 305/77.

Analysis: Rule 9(2) fastens the duty liability on the manufacturer or producer of excisable goods. The supplier's act of sending grey fabrics for processing, even coupled with a declaration under Notification 305/77, did not by itself make him the manufacturer of the processed goods. The notification regulated declarations regarding goods supplied to a job worker, but it did not create manufacturer status or shift excise liability to the supplier.

Conclusion: Duty was not payable by the appellant, and the demand could not be sustained.

---