2003 (3) TMI 444 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for the benefit of Notification No. 1/93-C.E. concerning the use of another person's brand name.
2. Allegation of clandestine removal of excisable goods without payment of duty.

Issue-wise Detailed Analysis:

1. Eligibility for the Benefit of Notification No. 1/93-C.E.:
The primary issue was whether the appellants, M/s. Magnam Automotive Industries, were using the brand name of another person, thereby disqualifying them from the benefit of Notification No. 1/93-C.E., dated 28-2-93. The appellants argued that they marketed their products under their brand name "Magnum" and used logos of other manufacturers (Hero Honda, TVS Suzuki, etc.) solely for identification purposes to ensure the correct brake shoes were used for specific vehicles. They emphasized that the logos were not used as brand names but as identifiers to prevent potential safety issues due to the visual similarity of brake shoes for different vehicles. The Tribunal found substantial force in the appellants' contention, noting that the products were sold under the "Magnum" brand name and the use of other manufacturers' names was merely to indicate compatibility with specific vehicles. Consequently, it was held that the use of these words/logos did not constitute the use of another person's brand name under Para 4 of the SSI Notification, making the appellants eligible for the notification's benefits.

2. Allegation of Clandestine Removal of Excisable Goods:
The second issue was whether the appellants had clandestinely removed excisable goods without paying duty. The Department alleged that the appellants suppressed the value of their clearances based on seized documents and statements from company personnel. The appellants contended that the documents were merely projections and not actual sales records, and they lacked the capacity to produce the alleged volumes. The Tribunal found that the appellants failed to establish that the chart showing the value of goods was a planning document. The Commissioner's findings indicated that the appellants had indeed suppressed the actual value of clearances. Despite the retraction of a statement by a partner, the appellants continued to deposit duty amounts, which supported the Department's case. The Tribunal noted that the retraction letter did not address the value of clearances or explain the documents used by the Department. The statement of another partner, Rajat Agarwal, corroborated the suppressed sales figures. Consequently, the Tribunal upheld the Commissioner's findings on this count but remanded the matter to the adjudicating authority to re-compute the duty demand and consider submissions regarding penalties and exports. The goods were not liable to confiscation as they did not bear a brand name.

Conclusion:
The appeals were disposed of with the Tribunal granting the benefit of Notification No. 1/93-C.E. to the appellants, while remanding the case for re-computation of duty and consideration of penalties and exports. The confiscation of goods was set aside.