2005 (8) TMI 446 - AT - Central Excise

Summary

Issues:
Appeal against duty demand and penalty imposition under Central Excise Act, 1944, involving interpretation of Notification No. 8/2003 for exemption up to Rs. 1 crore value.

Analysis:
The appellants filed a Stay petition and an appeal against an Order-in-Appeal upholding a duty demand of Rs. 1,05,580 under Section 11A(2) of the Central Excise Act, 1944, along with a penalty of Rs. 5,000 under Rule 25 of the Central Excise Rules, 2002, and interest under Section 11AB. The issue revolved around the interpretation of Notification No. 8/2003, dated 1-3-2003, concerning exemption up to Rs. 1 crore value. The appellants, a SSI Unit, argued that they were entitled to exemption as per the notification for their own products, excluding clearances of loan licensees bearing their brand names. The jurisdictional officer issued a show cause notice alleging that the clearances of loan licensees should not be excluded from the exemption limit. The Dy. Commissioner confirmed the duty demand, which was upheld by the Commissioner (Appeals).

The appellants contended that the clearances of loan licensees were already duty paid, not within the exemption scheme due to the brand names, and they had paid duty based on assessable value as per a Supreme Court judgment. They also argued that including these clearances in the exemption limit would result in double duty payment. The Tribunal noted that similar issues had been addressed in previous orders and referred to Para 3 of Notification No. 8/2003, which excluded clearances bearing another person's brand name from the exemption. Since the clearances of loan licensees bore their brand names and were duty paid, the Tribunal ruled that these clearances should not be considered for determining the exemption limit. Consequently, the Order-in-Appeal was deemed to lack merit, and the appeal was allowed with any consequential relief.

In conclusion, the Tribunal's decision centered on the correct interpretation of the notification to exclude clearances of loan licensees bearing their brand names from the appellants' exemption limit calculation. The ruling emphasized that duty paid clearances with another person's brand name should not be included in determining the exemption limit, aligning with the provisions of Notification No. 8/2003. The judgment provided clarity on the application of the exemption and upheld the appellants' position regarding the exclusion of such clearances in calculating the exemption threshold.