2007 (6) TMI 99 - AT - Central Excise

SSI Exemption - Two issue arises (i) Entitlement or otherwise of the appellants for the benefit of SSI Notification No.1/93-C.E. (ii) Whether demand made is time barred - Held (i)entitle (ii)yes

Summary

Issues:
1. Entitlement for small scale exemption notification (No. 1.-93-C.E.)
2. Time bar on the demand made

Analysis:

Issue 1 - Entitlement for Small Scale Exemption Notification:
The judgment deliberates on the entitlement of the appellants for the benefit of the small scale exemption notification. The explanation to the notification defines "brand name" or "trade name" as a name or mark used in relation to specified goods to indicate a connection between the goods and a person. The brand name "Soni" used by the respondent assessee, originally by the father and currently by both the son and father, does not establish ownership. Citing precedents, it is argued that if a brand name is not owned by a specific person, the benefit of exemption cannot be denied. The judgment highlights the importance of proving ownership and connection in the course of trade to deny the exemption. Reference is made to a circular emphasizing that lack of ownership does not deprive a unit of exemption benefits. The decision in C.C.E., Chandigarh-II v. Bhalla Enterprises further supports the position that the brand name must indicate a connection with the assessee's goods to deny exemption.

Issue 2 - Time Bar on the Demand:
Addressing the second issue of whether the demand made is time-barred, the judgment refers to conflicting judgments on the extended time-limit invocable when there are conflicting decisions. It questions how a layman assessee could be accused of mala fide when even Tribunals have differing opinions. The judgment cites a unanimous verdict to withdraw penalties due to conflicting pronouncements. It is emphasized that if penalties are not imposable, then duty cannot be demanded under Section 11A(2) as it becomes a matter of doli incapax. The decision in Vulcan Industrial Engg. Co. Pvt. Ltd. v. C.C.E., Ahmedabad-II sets a precedent that the same criteria for penalty imposition apply to invoking a larger limitation period.

In conclusion, the judgment finds in favor of the respondent assessee, stating that they are entitled to the small-scale exemption notification and that the demand raised under the show-cause notice is time-barred. The decision is based on the lack of ownership of the brand name and the absence of penalties, leading to the time-barred nature of the demand.