2002 (2) TMI 547 - AT - Central Excise

Summary

Issues:
1. Invocation of Rule 9(2) of Central Excise Rules for duty demand.
2. Allegation of suppression of vital information regarding brand name usage.
3. Application of SSI exemption notification.
4. Duty demand for goods cleared under parallel invoices.
5. Consideration of bona fide belief and suppression of material facts.
6. Re-examination of time bar and ownership of brand name.

Analysis:

1. Invocation of Rule 9(2) of Central Excise Rules for duty demand:
The appeal arose from an Order-in-Original confirming a demand for a larger period under Rule 9(2) of Central Excise Rules. The Commissioner invoked this rule based on the allegation of clandestine removal of Self Inking Rubber stamps with the brand name "PERMA." The appellants contested this invocation, arguing that they had filed classification lists and cleared goods under due payment of duty, maintaining that the Department was aware of the brand name usage.

2. Allegation of suppression of vital information regarding brand name usage:
The Commissioner relied on statements made by various officials to establish that the appellants were using the brand name "PERMA" owned by a foreign company, thereby disentitling them from the benefit of SSI exemption notification. The Commissioner found deliberate suppression of material facts regarding brand name usage, leading to the confirmation of duty demands for a significant amount and imposition of penalties.

3. Application of SSI exemption notification:
The appellants argued that they held a bona fide belief in owning the brand name "PERMA," registered under the Trade and Merchandise Marks Act, 1958. They contended that the Department was aware of the brand name usage and, therefore, larger period invocation was unjustified. The Tribunal noted conflicting judgments on this issue and remanded the matter for further examination by the Commissioner.

4. Duty demand for goods cleared under parallel invoices:
An uncontested duty demand for goods cleared under parallel invoices was acknowledged by the appellants, emphasizing their compliance with the duty payment for other clearances.

5. Consideration of bona fide belief and suppression of material facts:
The appellants raised the plea of bona fide belief and argued against the deliberate intent to evade duty. They emphasized the ownership of the brand name and the Department's awareness of its usage. The Tribunal directed a re-examination of the time bar issue and the ownership aspect, allowing the appellants to present additional evidence.

6. Re-examination of time bar and ownership of brand name:
The Tribunal set aside the impugned order and remanded the matter for de novo consideration by the Commissioner. The Commissioner was instructed to evaluate the time bar issue, the ownership of the brand name, and the factual aspects presented by the appellants, ensuring a detailed speaking order is passed.

In conclusion, the Tribunal's decision focused on the need for a comprehensive re-examination of the issues raised, including the application of rules, suppression of facts, and the validity of duty demands, emphasizing the importance of establishing bona fide belief and Department's awareness in determining the duty liability.