2010 (6) TMI 694 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement to exemption from Central Excise duty under Notification No. 1/93-C.E.
2. Invocation of extended period of limitation.
3. Imposition of penalty.

Summary:

1. Entitlement to exemption from Central Excise duty under Notification No. 1/93-C.E.:
The respondents, engaged in manufacturing ordinary Portland cement under the brand name "Diamond," claimed exemption from Central Excise duty u/s Notification No. 1/93-C.E., as amended by Notification No. 16/97-C.E. The Department contended that the brand name "Diamond" belonged to M/s. Mysore Cements Ltd., registered under the Trade Merchandise Marks Act, 1958, and thus, the respondents were not entitled to the exemption. The Deputy Commissioner, Meerut, dropped the proceedings, noting differences in the logos used by the respondents and M/s. Mysore Cements Ltd. The Commissioner (Appeals) upheld this decision, but the Tribunal found that the respondents were not entitled to the exemption as the brand name indicated a connection with another company, disqualifying them from the benefit under the notification.

2. Invocation of extended period of limitation:
The respondents argued that the Department could not invoke the extended period of limitation as there was no suppression of fact, misstatement, or fraud. They claimed they were under a bona fide belief that the brand name "Diamond" was not the trademark of any other cement manufacturer. However, the Tribunal noted that the respondents did not disclose that the brand name belonged to M/s. Mysore Cements Ltd. The Tribunal found that the respondents' failure to disclose this fact constituted suppression with intent to evade duty, justifying the invocation of the extended period of limitation.

3. Imposition of penalty:
The Department argued that the authorities erred in not imposing a penalty. The Tribunal noted that the adjudicating authority had not addressed the issue of penalty as it had dismissed the proceedings on merits. The Tribunal held that the issue of penalty could only arise after confirming the duty liability. Since the duty liability was not quantified, the matter was remanded to the adjudicating authority to quantify the duty liability along with interest and penalty, if any, after hearing the parties.

Conclusion:
The appeal was allowed, the impugned orders were set aside, and the matter was remanded to the adjudicating authority to quantify the duty liability along with interest and penalty, if any, within three months from the date of receipt of the order.