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2010 (3) TMI 710 - AT - Central ExciseSSI Exemption Brand name of another Lawful consent and assignment exemption under notification not apply to the specified goods bearing a brand name or trade name whether registered or not of another person except in the cases specified - appellants case does not fall in any of the exceptions Held that - existence of assignment cannot justify the benefit of the notification
Issues Involved:
1. Entitlement to SSI exemption under Notification No. 8/2001. 2. Legality of brand name usage and its implications on duty liability. 3. Confiscation of goods and imposition of penalties. 4. Demand for interest under Section 11AB of the Central Excise Act, 1944. 5. Limitation period for issuing the show cause notice. 6. Penalties imposed on the Directors under Rule 26 of the Central Excise Rules, 2002. Issue-wise Detailed Analysis: 1. Entitlement to SSI Exemption under Notification No. 8/2001: The appellants claimed SSI exemption under Notification No. 8/2001 while using the brand name "GURU," which belonged to another entity, M/s. United Cocks Pvt. Ltd. The Tribunal observed that the notification explicitly disallows exemption for goods bearing a brand name or trade name of another person, irrespective of consent or assignment. The appellants' reliance on various agreements and registration of the brand name did not suffice to claim exemption, as the notification's conditions were not met. 2. Legality of Brand Name Usage and Its Implications on Duty Liability: The Tribunal noted that the brand name "GURU" was owned by M/s. United Cocks Pvt. Ltd., and the appellants used it based on agreements and subsequent registration. However, the use of another's brand name disqualified them from claiming exemption under the notification. The Tribunal referred to Apex Court decisions, emphasizing that mere consent or assignment does not nullify the notification's conditions. The appellants' registration as subsequent proprietors did not alter the fact that the brand name belonged to another entity during the relevant period. 3. Confiscation of Goods and Imposition of Penalties: The Tribunal found that the confiscation of goods and penalties imposed under Rule 25 of the Central Excise Rules, 2002, were not justified. The authorities could not invoke Rule 25 as the appellants had time to file returns for the seized goods. Consequently, the order for confiscation and penalties against the company and its Directors was set aside. 4. Demand for Interest under Section 11AB of the Central Excise Act, 1944: The Tribunal held that interest under Section 11AB could only be demanded from 11-5-2001, the date when the provision came into force. Therefore, any demand for interest for the period before this date was unjustified. 5. Limitation Period for Issuing the Show Cause Notice: The Tribunal addressed the appellants' contention regarding the limitation period, noting that the show cause notice was issued on 7-1-2004 for the period from February 2001 to July 2003. The appellants had not disclosed the use of the brand name belonging to another entity before the investigation on 11-7-2003. Thus, the Tribunal found that there was suppression of facts, and the extended period for issuing the show cause notice was justified. 6. Penalties Imposed on the Directors under Rule 26 of the Central Excise Rules, 2002: The Tribunal found no evidence of the Directors' involvement in the concealment or clandestine removal of goods. The impugned order lacked specific findings connecting the Directors to such activities. Consequently, the penalties imposed on the Directors under Rule 26 were set aside. Conclusion: The appeals were partially successful. The Tribunal set aside the confiscation of goods and penalties against the company and the Directors. The demand for interest was limited to the period from 11-5-2001 onwards. The claim for SSI exemption was denied due to the use of another's brand name, and the extended period for issuing the show cause notice was upheld due to suppression of facts. The appeals were disposed of accordingly.
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