2004 (6) TMI 356 - AT - Central Excise

Summary

Issues:
Whether the appellants were manufacturing excisable goods bearing each other's brand names, making them ineligible for the benefit of Exemption Notification No. 9/2000-C.E., dated 1-3-2000.

Analysis:
The appeals filed by two entities revolved around the issue of manufacturing excisable goods bearing each other's brand names. The appellants, both engaged in manufacturing PET Bottles, inadvertently used each other's dyes due to a mix-up during repair. The Commissioner (Appeals) upheld the demand of duty against both appellants, citing the use of each other's brand names on the PET bottles. The appellants argued that the mix-up occurred unintentionally and that there was no motive for such actions. They contended that the mistake arose from a change in dyes received after repair, leading to the unintended use of each other's brand names. Additionally, they highlighted that no orders were placed for manufacturing bottles bearing the other party's brand name. The appellants also referenced a Board's Circular to support their case.

In response, the Revenue argued that the mistake should have been identified immediately after the dyes were put to use, rather than continuing production for a significant period. They also disputed the applicability of the Board's Circular, stating that the brand names on the PET Bottles did not belong to manufacturers or traders using the bottles for packing.

Upon considering the arguments, the Tribunal found that both appellants manufactured PET Bottles bearing their respective brand names. The mix-up in dyes led to the inadvertent use of each other's brand names on the bottles. The Adjudicating Authority acknowledged the plausibility of the appellants' explanation, emphasizing the absence of evidence indicating deliberate evasion of excise duty. Notably, no documentary evidence was found to establish intentional manufacturing and sale of branded goods. The Tribunal concurred with these findings, emphasizing that there was no motive for the appellants to manufacture bottles bearing each other's brand names. Given the circumstances and lack of evidence supporting deliberate action, the Tribunal set aside the demand of duty against both appellants, allowing their appeals.

In conclusion, the judgment clarified that the unintentional use of each other's brand names on PET Bottles resulted from a mix-up in dyes, rather than a deliberate attempt to evade excise duty. The Tribunal's decision was based on the lack of evidence supporting intentional wrongdoing and the plausible explanation provided by the appellants regarding the mix-up.