2010 (7) TMI 567 - AT - Central Excise

Demand - Notification No. 1/93-C.E., dated 28-2-93 - brand names, which are being used by the respondents, were already declared as a brand names of another manufacturer viz. M/s. Lyallpur Rubber Mills and that too in relation to the similar products - it was the specific plea of the respondents that the said names were not the brand names of M/s. Lyallpur Rubber Mills but they were the common brand names, which were being used by different manufacturers - Circular merely advises that in case of brand name used by different manufacturers, which constitute common brand name, would not disentitle the manufacturer from claiming benefit under the said notification on use of such brand name The claim pertaining to the cum-duty price and the penalty is concerned, undisputedly was not considered by the Commissioner (Appeals) - Decided in the favour of the assessee by way of remand

Issues Involved:
1. Entitlement to SSI exemption under Notification No. 1/93-C.E.
2. Ownership and usage of brand names.
3. Cum-duty price calculation.
4. Imposition of penalty.

Detailed Analysis:

1. Entitlement to SSI Exemption under Notification No. 1/93-C.E.
The respondents, manufacturers of Tyres, Tubes, Tyre flaps, and Rice Rubber Rolls, availed the benefit of SSI exemption under Notification No. 1/93-C.E., dated 28-2-1993. They filed declarations under Rule 173B of the Central Excise Rules, 1944, declaring various brand names. However, it was found that another industry, M/s. Lyallpur Rubber Mills, had been using similar brand names prior to the respondents. The Adjudicating Authority denied the benefit of the notification, confirmed the demand of Rs. 3,00,246/-, and imposed a penalty of Rs. 50,000/-. The Commissioner (Appeals) reversed this decision, but the Tribunal ultimately held that the respondents were not entitled to the benefit of the notification for the period in question, as they failed to prove that the brand names used were common and not owned by another entity.

2. Ownership and Usage of Brand Names
The respondents contested that there was no material to prove the ownership of the brand names by M/s. Lyallpur Rubber Mills and claimed that these were common brand names used by different manufacturers. The Tribunal emphasized that under the notification, the manufacturer must establish that the brand name does not belong to another person. The Department had provided declarations and classification lists from M/s. Lyallpur Rubber Mills showing prior use of the same brand names. The Tribunal found that the respondents failed to discharge their burden of proof, as required by law, to show that the brand names were common and not owned by another entity.

3. Cum-duty Price Calculation
The respondents argued that the price charged was a cum-duty price and that the element of duty should be excluded when working out the assessable value. The Tribunal noted that this issue was not considered by the Commissioner (Appeals) and remanded the matter to the adjudicating authority to address this issue in accordance with the provisions of law.

4. Imposition of Penalty
The respondents contended that no penalty was warranted as there was no case of duty evasion established against them. The Tribunal did not provide a final decision on the penalty but remanded this issue along with the cum-duty price calculation to the adjudicating authority for reconsideration.

Conclusion
The Tribunal set aside the impugned order, holding that the respondents were not entitled to the benefit of the SSI exemption notification for the period in question due to failure to prove that the brand names were common and not owned by another entity. The issues of cum-duty price and penalty were remanded to the adjudicating authority for further consideration and decision in accordance with the law, to be resolved expeditiously by 31st December 2010.

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