2004 (11) TMI 346 - AT - Central Excise

Summary

Issues:
1. Availing SSI exemption for machined brackets bearing buyer's brand name.
2. Confirmation of demand of duty and imposition of penalties.
3. Interpretation of Notification clause regarding exemption for goods bearing brand name.
4. Denial of relief under Notification clause due to procedural lapse.
5. Bar on demand by limitation period.
6. Payment of duty before show cause notice issuance affecting penalty imposition.

Analysis:
1. The appellants, engaged in manufacturing various parts, availed SSI exemption but faced revenue's claim of wrongly availing it for machined brackets bearing buyer's brand name. Appellants argued these were manufactured for buyer's alternators and not with buyer's brand name, citing Notification clause exceptions for parts used as original equipment.

2. The original authority confirmed duty demand and imposed penalties, later upheld by Commissioner (Appeals) partially. The present appeal challenged the penalty under Rule 173Q but upheld duty demand and penalty under Section 11AC.

3. The Tribunal analyzed the Notification clause, noting exemptions for specified goods used as original equipment, subject to following prescribed procedures. Appellants' relief claim under clause 4(a) was denied due to not filing the required declaration, despite no doubt on goods' use as original equipment by buyers.

4. The Tribunal opined that the procedural lapse should not hinder appellants' entitlement to relief, as the required declaration was merely an intimation to the revenue. As there was clarity on total clearances and goods' use as original equipment, benefits should not be denied.

5. Additionally, the demand was found to be time-barred, raised after six months from the relevant date. The appellants argued no intention to evade duty, as it was claimed by customers as credit, and they approached authorities for Rule 57E certificate post depositing duty.

6. The Tribunal agreed with appellants, finding no misstatement or suppression warranting longer limitation period. Notably, the appellants had paid the entire duty before the show cause notice, aligning with a Tribunal decision barring penalty imposition under Section 11AC.

7. Ultimately, the Tribunal allowed the appeal on merit and limitation grounds, highlighting no penalty could be legally imposed due to duty payment before notice issuance.