Excise exemption for factory-made patterns used in casting was upheld under relevant notifications, and the duty demand was rejected.

Aluminium and wooden patterns manufactured in the factory and used to obtain castings for machines made by the same manufacturer fell within the exemption notifications covering patterns used within the factory or in another factory of the same manufacturer; on that basis, no ground existed to deny central excise exemption, and the departmental duty demand was rejected.

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Issues: Whether aluminium and wooden patterns manufactured in the respondent's factory were entitled to exemption from central excise duty and, therefore, whether the departmental demand was sustainable.

Analysis: The exemption claim was examined with reference to the notifications relied upon by the respondent, including the notifications applicable to patterns manufactured in the factory and used within the factory or in another factory of the same manufacturer. The record showed that the patterns were manufactured in the respondent's premises and thereafter used for obtaining castings required for the machines manufactured by them. In that factual and legal setting, no basis was found to deny the exemption or to sustain the proposed duty demand.

Conclusion: The aluminium and wooden patterns were held to be covered by the exemption, and the departmental demand was rejected.

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