2004 (2) TMI 498 - AT - Central Excise

Summary

Issues: Duty demand under small-scale exemption notification; Penalty imposition; Application of extended period of limitation; Misdeclaration of brand name; Confiscation of plant and machinery.

In the present case, the Appellate Tribunal CESTAT, Mumbai dealt with various issues arising from the impugned order confirming a duty demand of Rs. 16,35,727 on the appellants and imposing a penalty equal to the duty amount. The duty demand was based on the appellants wrongly availing the small-scale exemption under Notification 1/93 during the period of 1-4-1994 to 30-11-1995 for headlamp assemblies affixed with the brand name 'RAVI' owned by another unit, Patodia Glass Industries Limited. The Tribunal considered the application of the extended period of limitation as the show cause notice was issued on 31-12-1996.

Regarding the merits of the case, the Tribunal found that the appellants had no case as the brand name 'RAVI' belonged to Patodia Glass Industries Limited, and the headlamp assemblies manufactured by the appellants were identical to the products of the brand name owner. Citing the Larger Bench decision in CCE, Chandigarh v. Fine Industries, the Tribunal upheld the duty demand. Additionally, the Tribunal noted that the appellants deliberately misdeclared in the classification list that they were not using any other factory's brand name, despite knowing that the 'RAVI' brand belonged to Patodia Glass Industries Limited. Consequently, the duty demand was upheld, but the penalty imposed under Section 11AC of the Central Excise Act, 1944, was set aside as this provision was not applicable during the period of the offense. The Tribunal also set aside the interest under Section 11AB for the same reason.

Furthermore, the Tribunal addressed the issue of confiscation of plant, machinery, etc., under Rule 173Q and upheld the same as no arguments were presented against it. Ultimately, the Tribunal partly allowed the appeal by upholding the duty demand but setting aside the penalty and interest, while confirming the confiscation of plant and machinery. The judgment provides a detailed analysis of each issue involved, emphasizing the importance of compliance with small-scale exemption notifications and the consequences of deliberate misdeclarations in excise matters.