2002 (12) TMI 561 - Commission - Central Excise

Issues Involved:
1. Eligibility for Small Scale Industry (SSI) exemption.
2. Admissibility of Modvat credit.
3. Valuation of duty on seized goods.
4. Use of the brand name 'National.'
5. Calculation of duty liability.
6. Grant of immunities from penalties and prosecution.

Issue-wise Detailed Analysis:

1. Eligibility for Small Scale Industry (SSI) Exemption:
The applicant claimed SSI exemption for plastic tanks of capacity exceeding 300 liters, which was contested by the Revenue. The main issue was whether the use of the brand name 'National' disqualified the applicant from SSI benefits. The Commission examined the proviso 4 to Notification No. 1/93 and concluded that the brand name 'National' was not exclusively owned by any particular person. The applicant provided evidence showing multiple entities using the same brand name, which supported their claim. Therefore, the Commission found the applicant eligible for SSI exemption from 1994-95 to 1997-98.

2. Admissibility of Modvat Credit:
The applicant claimed Modvat credit for the inputs used during 1995-96 to 1997-98. However, the Commission noted that the applicant did not avail the Modvat credit within the stipulated six months as per Rule 57G of the Central Excise Rules, 1944. Consequently, the Commission disallowed the Modvat credit claim.

3. Valuation of Duty on Seized Goods:
The Revenue argued that the duty on seized goods was calculated twice. The applicant contested this, stating that the duty was calculated on the same goods multiple times. The Commission directed both parties to file submissions on this issue and concluded that the duty liability should be calculated considering the benefit of cum-duty price and treating the value as cum-sales tax.

4. Use of the Brand Name 'National':
The applicant used the brand name 'National,' which was not registered with the Registrar of Trade Marks. The Revenue contended that the brand name was owned by M/s. National Plastics, but the Commission found no exclusive ownership of the brand name. The Commission referred to the Board's circular and the Tribunal's judgment in Hem Paints Pvt. Ltd., concluding that the use of an unregistered brand name did not disqualify the applicant from SSI benefits.

5. Calculation of Duty Liability:
The Commission settled the duty liability at Rs. 22,14,921/-, considering the SSI exemption and cum-duty price. The applicant had already paid Rs. 14,95,834/-, and the balance amount of Rs. 7,19,087/- was to be paid within 30 days from the receipt of the order. Additionally, the duty liability of Rs. 1,57,549/- for undervaluation of goods was also included.

6. Grant of Immunities from Penalties and Prosecution:
The Commission granted total immunity from fines and penalties under the Central Excise Act/Rules, considering the applicant's full and true disclosure and cooperation. However, since prosecution was already launched, the Commission did not grant immunity from prosecution. The applicant was also directed to pay a simple interest of 10% on the evaded duty from 28-9-96 until the payment date.

Conclusion:
The Commission concluded that the applicant was eligible for SSI exemption, disallowed the Modvat credit claim, and settled the duty liability at Rs. 22,14,921/-. Immunity from fines and penalties was granted, but not from prosecution. Interest at 10% was also imposed on the evaded duty.

← Previous Next →