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of <h1>Appeal Wins: Duty Not Demanded on In-Factory Patterns/Jigs; Penalties on Development Charges Found Unclear.</h1> <h3>ASHOK IRON WORKS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BELGAUM</h3> ASHOK IRON WORKS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BELGAUM - 2004 (168) E.L.T. 198 (Tri. - Bang.) Issues involved: Appeal against Order-in-Original No. 14/2000 passed by the Commissioner of Central Excise, Belgaum regarding duty demand on patterns/jigs and fixtures, development charges, and penalty imposition.Duty on Patterns/Jigs and Fixtures:The appellant contended that duty demand on patterns/jigs used within the factory of production is contrary to exemption notifications u/s 46/94-C.E., 56/95-C.E., and 67/95-C.E. The Tribunal agreed, noting duty exemption for goods used within the factory of production. The JDR also conceded that duty on jigs/patterns used for manufacturing is not sustainable.Development Charges:The Commissioner demanded duty on development charges, but the appellant argued that these charges should be levied on the excisable goods manufactured from the patterns. The Tribunal referenced a previous case to support the view that duty should be demanded on excisable goods, not directly on development costs. The Department failed to ascertain the number of castings that could be manufactured from the patterns, leading to the conclusion that duty cannot be demanded on developmental charges directly.Penalty Imposition:The Commissioner imposed a penalty under Rule 173Q(i) read with Section 11AC. The appellant argued that Section 11AC is not applicable for goods cleared before 28-9-96. The Tribunal found the penalty imposition unclear and referenced various decisions supporting the appellant's contention. Conclusion:The Tribunal allowed the appeal, stating that duty cannot be demanded on patterns/jigs used within the factory of production and that duty should be levied on excisable goods manufactured from the patterns, not on development charges directly. The unclear penalty imposition was also noted, and the appeal was allowed with consequential relief, if any.
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