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2005 (7) TMI 169 - AT - Central ExciseModvat credit - Valuation (Central Excise) - Demand - Limitation - Penalty and interest - HELD THAT:- The duty cannot be directly charged on the development charges. In terms of the Board Circular, the amount is required to be amortized and duty worked out. After procuring a certificate from the cost accountant. Although in the case of Ashok Iron Works [2004 (2) TMI 482 - CESTAT, BANGALORE], the Bench had allowed the appeal solely on the basis that duty cannot be demanded directly on development charges but the Board Circular had not been examined. In view of the Board Circular the matter has to go back to the Original authority for amortizing the cost in terms of the certificate to be produced from the cost accountant. We are of the considered opinion that the aspect pertaining to time limit and time-bar is required to be re-examined in the light of the submissions made by the appellants and recorded in this order. The appellants had immediately paid the amount before the issue of show cause notice but that by itself will not justify confirmation of demand without examining all the pleas raised by the assessee. The appellant have cited several judgments to show that there was no suppression of facts and the show cause notice issued after three years. After collecting all the details by the Board in this regard. Several judgments have been cited as the duty has not been properly quantified. In terms of the Board Circular, the matter has to go back to the Original authority. The demands could be re-worked out after reconsidering the prayer of time-bar. The aspect pertaining to availment of Modvat credit is also to be resolved in the light of submissions made by the party. Penalty and interest is concerned under Sections 11AB and 11AC of the Act, the contention of appellants that the demand is prior to the introduction of the section and that penalty and interest is not leviable is justified, as the amounts have been paid even before the issue of show cause notice in terms of the cited judgment. The penalty and interest is set aside. The appeal is allowed by remand for re-working out the duty in terms of the direction given in this order for re-examining the aspect pertaining to availment of Modvat credit.
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