2004 (1) TMI 209 - AT - Central Excise

Summary

Issues: Challenge against imposition of penalty under Section 11AC and demand of interest under Section 11AB upheld by Commissioner (Appeals).

In this case, the appellants were engaged in manufacturing goods falling under specific chapters of the Central Excise Tariff Act, 1985, and also undertook job work and repair on free issue materials. The issue arose when the appellants, despite considering the job work they did as repair work, paid duty without including the value of the materials received. A show cause notice was issued demanding a specific amount based on the value of the materials supplied. The appellant contended that a particular legal precedent would not be applicable to their case. During the appeal, it was observed that the job work undertaken by the appellant was indeed in the nature of repair work, justifying their position of not following the legal precedent cited. Consequently, it was held that the demand of penalty and interest was not sustainable, leading to the setting aside of the impugned order to the extent challenged, and the appeal was allowed accordingly.