2012 (8) TMI 626 - AT - Central Excise

Extended period of limitation SSI exemption assessee using brand name of other Held that - Assessees, M/s. Micro Chem Products MCPPL - Another family concern, namely, M/s. Micro Plates Pvt. Ltd. MPPL - MCPPL have removed finished goods without payment of duty while using the brand name Micro of MPPL on containers - contention of the assessees that Micro is not a brand name belonging to MPPL but stands for the first name of MCPPL, cannot be accepted - MCPPL is not entitied to the benefit of SSI exemption on the ground of use of brand name of another person - assessees are liable to pay the duty as demanded in the show-cause notice together with appropriate interest and also pay amount of penalty equal to duty, as the demand has been upheld by invoking the extended period of limitation in favor of revenue

Summary

Issues:
1. Denial of concession under SSI notification for removal of finished goods without payment of duty using another brand name.
2. Use of brand name 'Micro' belonging to another person.
3. Extended period of limitation for raising the demand.
4. Applicability of suppression due to non-disclosure of brand name usage.

Analysis:
1. The case involved M/s. Micro Chem Products (India) Pvt. Ltd. (MCPPL) manufacturing chemicals for the printing industry. They used the brand name 'Micro' of M/s. Micro Plates Pvt. Ltd. (MPPL) on their containers without paying duty. A show-cause notice was issued proposing denial of SSI concession, recovery of duty, interest, and penalty. The Additional Commissioner dropped the proceedings, stating 'Micro' was a common word. The Commissioner (Appeals) upheld this decision, leading to the Revenue's appeal.

2. Evidence revealed that 'Micro' was coined by Shri N.C. Shroff and used by MCPPL to establish itself in the market, as they were new. Shroff confirmed 'Micro' as MPPL's brand name used on labels from the beginning. The Tribunal rejected MCPPL's claim that 'Micro' represented their first name, affirming that MCPPL was not entitled to SSI exemption due to using another person's brand name. The extended period of limitation was deemed applicable as MCPPL failed to disclose this fact to the department.

3. Referring to a Bombay High Court case, the Tribunal emphasized that non-disclosure of using another's brand name amounts to suppression, allowing the extended period for raising demands. The Tribunal dismissed MCPPL's argument that past decisions supported their position, as this argument was not raised earlier. Consequently, the Tribunal held MCPPL liable to pay the demanded duty, interest, and a penalty equal to the duty amount, as the demand was upheld using the extended limitation period.

4. The Revenue's appeal was allowed, and the cross-objection was dismissed as mere comments on the Revenue's appeal. The judgment highlighted the importance of disclosing the use of another's brand name to avoid suppression allegations and the applicability of the extended limitation period in such cases.