2006 (2) TMI 473 - AT - Central Excise

Summary

Issues:
1. Demand of duty for pharmaceutical products under brand names
2. Appeal for waiver of pre-deposit of duty and penalty amounts
3. Ownership of brand names and financial hardships
4. Admissions made by the appellants regarding brand names
5. Consideration of evidence and remand for decision on merits

Analysis:
1. The case involved a demand of duty amounting to Rs. 16,59,858 from the appellants, who were manufacturers of pharmaceutical products, for the period from 1-9-1997 to 14-6-2002 due to the denial of SSI benefit based on the clearance of products under brand names belonging to their customers.

2. The appellants appealed to the Commissioner (Appeals) and sought a waiver of pre-deposit of duty and penalty amounts. The appellate authority directed them to pre-deposit Rs. 5 lakhs under Section 35F of the Central Excise Act, which the appellants failed to comply with, leading to the dismissal of their appeal.

3. The appellants claimed ownership of the brand names through assignment deeds executed in favor of their buyers. They argued that the original authority's findings were solely based on statements of dealers, and their request for cross-examination was denied. The appellants also mentioned financial bankruptcy but failed to provide evidence of financial hardships.

4. The SDR contended that the appellants had admitted to not being owners of the brand names, and this admission was never retracted, making further evidence gathering unnecessary.

5. Upon careful consideration, it was found that the appellants' confessional statement contradicted their ownership claim, although some brand names were seemingly under their control. The appellants were not engaged in manufacturing for three years, which was relevant to their financial situation. The Tribunal reduced the pre-deposit amount to Rs. 1 lakh and remanded the case to the Commissioner (Appeals) for a decision on merits, subject to the appellants' compliance within eight weeks.