2003 (2) TMI 373 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for Small Scale exemption Notification.
2. Ownership and assignment of the brand name "An-herb".
3. Invocation of the extended period of limitation.
4. Imposition of penalties under Section 11AC and Rule 173Q of the Central Excise Rules, 1944.
5. Confiscation of seized goods and imposition of redemption fine.

Issue-Wise Detailed Analysis:

1. Eligibility for Small Scale exemption Notification:
The primary issue in the appeals was whether the goods manufactured by M/s. C.H. Herbs, bearing the brand name "An-herb," were eligible for the Small Scale exemption Notification. The Deputy Commissioner initially denied the exemption, asserting that the goods bore the brand name of another entity, M/s. Anzalp Pharmaceuticals Pvt. Ltd. (ANZALP). However, the Commissioner (Appeals) later allowed the benefit, claiming that the brand name had been sold to C.H. Herbs by ANZALP. The Tribunal examined evidence, including statements from various individuals and documents, to determine the actual ownership and control over the brand name.

2. Ownership and assignment of the brand name "An-herb":
The Tribunal scrutinized whether the brand name "An-herb" was genuinely assigned to M/s. C.H. Herbs and, if so, from what date. The assessee contended that the brand name was assigned on 22-8-95, supported by a letter from ANZALP to the Controller, Food and Drug Administration. Conversely, the Revenue argued that the brand name was never assigned, as ANZALP continued to get products manufactured by other job workers under the same brand name. The Tribunal found that the sale deed was executed in October 1997, after the Central Excise Department's visit, suggesting that the assignment was a device to evade duty. The Tribunal concluded that there was no valid assignment in 1995 and that ANZALP retained control over the brand name.

3. Invocation of the extended period of limitation:
In Appeal No. E/1070/2001, the Tribunal agreed with the assessee that the extended period of limitation could not be invoked. The Department had already initiated proceedings after visiting the factory on 30-9-97, indicating awareness of the manufacturing activities. Consequently, the demand was enforceable only for the six months preceding the show cause notice issued on 2-6-2000.

4. Imposition of penalties under Section 11AC and Rule 173Q of the Central Excise Rules, 1944:
The Tribunal addressed the imposition of penalties, noting that penalties under both Section 11AC and Rule 173Q could not be imposed simultaneously. The penalty under Section 11AC was set aside due to the non-invocation of the extended period of limitation. However, the Tribunal upheld the penalty under Rule 173Q, leaving it to the Adjudicating Authority to redetermine the duty demand and consider the imposition of penalty under Rule 173Q.

5. Confiscation of seized goods and imposition of redemption fine:
The Tribunal upheld the confiscation of seized goods, as they were cleared without payment of duty. However, the redemption fine was reduced from Rs. Four Lakhs to Rs. One Lakh, considering the circumstances.

Conclusion:
The Tribunal allowed Appeal No. E/449/2002-C filed by the Revenue, denying the benefit of the SSI Notification to M/s. C.H. Herbs. The Tribunal remanded Appeal No. E/1070/2001 to the Adjudicating Authority for redetermining the duty for the past six months and considering the imposition of penalty under Rule 173Q. The penalties under Section 11AC were set aside, and the redemption fine was reduced. Both appeals were disposed of accordingly.