2003 (9) TMI 418 - AT - Central Excise

Confiscation of flat knitting machines and imposition of redemption fine and penalty - Duty demand - SSI Exemption - Brand name - Evidence - HELD THAT - There is no material on record to suggest that any of these certificates issued by the above said firms on enquiry was found to be fictitious and factually incorrect. No statement of any Proprietor/Partner of these firms was recorded. Therefore the certificates issued by all these firms could not be brushed aside by the authorities below. In the face of this evidence the retracted alleged confessional statement of Shri Jatinder Singh Proprietor of the appellant s firm could not be given much credence. The authorities below have wrongly accepted the said statement of Shri Jatinder Singh as substantial evidence. Apart from this even otherwise legally it cannot be concluded that the appellants were using the brand name of another person. The brand name ELEX according to the Department belonged to M/s. Elex Engineering Works. But Shri Jatinder Singh who is the proprietor of the appellant s firm is one of the partners in that firm. Being co-owner of the brand name in the above said firm he could not be said to had used the brand name of another person in the manufacture and clearance of the goods by him in his individual capacity. He cannot be legally said to be running another firm of M/s. Elex Industries as single person cannot constitute any firm under the law. Therefore being already co-owner of the brand name he was competent to use the same. Thus neither the benefit of SSI exemption Notifications including No. 1/93-C.E. and 8/98-C.E. dated 2-6-1998 could not be legally denied to the appellants nor the confiscation of the goods could be ordered. Therefore the impugned Orders of the Commissioner (Appeals) in both the appeals are set aside. The appeals of the Appellants are allowed with consequential relief if any permissible under the law.

Summary

Issues: Appeal against duty demand, penalties, confiscation of goods, and imposition of fines and penalties.

In the present case, the appellants, engaged in manufacturing flat knitting machines, were denied the benefit of SSI exemption due to their alleged use of the brand name "ELEX" belonging to another company. The authorities confirmed duty demand, penalties, and confiscation of goods based on this allegation. However, the appellants contested this denial of benefits and imposition of penalties.

Upon hearing both sides, the Tribunal noted that the denial of SSI exemption was solely based on the use of the brand name "ELEX," but there was insufficient evidence to substantiate this claim. The confessional statement of the appellant's proprietor, which initially acknowledged the use of the brand name, was later retracted, casting doubt on its reliability. The Tribunal emphasized the need for independent corroboration of such statements before relying on them, citing legal precedent.

Furthermore, the Tribunal found no corroborating evidence supporting the retracted statement. Certificates from various buyers of the machines explicitly stated that the machines purchased did not bear the brand name "ELEX." The Tribunal highlighted the significance of this evidence and criticized the authorities for accepting the retracted statement without sufficient verification.

Legally, the Tribunal determined that since the appellant's proprietor was a co-owner of the brand name in question, he could not be considered as using another person's brand name. As a co-owner, he had the right to use the brand name, and therefore, the denial of benefits and confiscation of goods were unjustified.

Consequently, the Tribunal set aside the impugned orders of the Commissioner (Appeals) and allowed the appeals of the Appellants, granting them consequential relief as permissible under the law.