2005 (7) TMI 483 - AT - Central Excise

Summary

Issues:
1. Contesting correctness of order-in-appeal dropping duty demand and setting aside confiscation of unaccounted goods.
2. Use of logo belonging to another person on products affecting SSI exemption eligibility.
3. Confiscation of seized goods and penalty imposition under Rule 173Q.
4. Contrary views of Commissioner (Appeals) on SSI exemption and confiscation under Rule 226.

Analysis:
1. The appeal concerns the Revenue challenging the order-in-appeal that dropped duty demand and set aside the confiscation of unaccounted goods. The respondents, engaged in manufacturing excisable goods, used a logo belonging to another person on their products. Central Excise Officers found unaccounted goods during a visit to the factory, leading to duty demand confirmation and confiscation by the adjudicating authority.

2. The Commissioner (Appeals) reversed the adjudicating authority's order, stating that using another person's logo did not disentitle the respondents from SSI exemption since they also used their brand name. However, this view was deemed incorrect based on a Supreme Court ruling where using another person's logo was considered grounds for exemption disqualification.

3. The Commissioner (Appeals) also opined that the goods were not liable for confiscation under Rule 226 due to non-maintenance of proper records by the respondents. Nonetheless, the Tribunal disagreed, asserting that the non-accountal of seized goods was undisputed, justifying confiscation under Rule 173Q. The failure to account for goods, not just record-keeping lapses, warranted confiscation, and the Commissioner erred in setting it aside.

4. The Tribunal held that the Commissioner's view on non-accountal goods and confiscation under Rule 226 was legally flawed. The confiscation of unaccounted goods was justified, and the Commissioner lacked authority to overturn it. Consequently, the impugned order was set aside, and the original order was reinstated, accepting the Revenue's appeal.