2013 (8) TMI 267 - AT - Central Excise

Waiver of pre-deposit - Clandestine Removal of goods Held that - Allegation regarding clandestine removal is based only on the Sales Manager Report (SMR) and not corroborated by evidences showing clandestine manufacture and clearance. The sharing of budget expenditure for advertisement does not provide any better evidence Relying upon the decision in the case of CCE Meerut Vs Moon Beverages Ltd. - 2002 (150) ELT 976 (Tri.-Del.).- Decided in favor of Assessee. SSI exemption Using the brand name of others - Wrong availment of SSI exemption for goods using brand name Bisleri Club Soda - Brand name was owned by M/s. Parle (Exports) Ltd. (PEL, for short) and not AMPL Held that - Relying upon the decision in the case of CCE Bangalore Vs Brindavan Beverages (P) Ltd 2007 (6) TMI 4 - SUPREME COURT OF INDIA has held that in such circumstances, extended period of time cannot be invoked against the assessee for invoking any demand because the arrangement between PEL and AMPL was not known to the assessee therein SSI exemption Using the brand name of others - Wrong availment of SSI exemption for goods using brand name CITRA Held that - Relying upon the decision in the case of CCE Bangalore Vs Brindavan Beverages (P) Ltd 2007 (6) TMI 4 - SUPREME COURT OF INDIA , it is held that applicant was not aware of the arrangement between LFFPL and PEL and suppression cannot be alleged against them - Deposit of Rs.10 lakhs already made by applicant in this matter which is sufficient for admission of the appeal.

Issues:
Allegation of clandestine removal involving duty amount, Wrong availment of SSI exemption for goods using brand names, Clubbing of clearances for SSI exemption eligibility, Time-barred demand, Appropriation of refund amount, Brand ownership for SSI exemption eligibility.

Analysis:
1. Allegation of Clandestine Removal:
The demand for clandestine removal was primarily based on the Sales Manager Report (SMR) submitted by the applicant-company. The counsel argued that the SMR alone is insufficient evidence and lacks corroboration of clandestine manufacture and clearance. He highlighted that similar cases against other franchisees based on the same evidence were dropped. The Tribunal noted that the sharing of budget expenditure for advertisement did not strengthen the case. Considering past decisions in favor of manufacturers in similar situations, the Tribunal found the evidence insufficient to support the demand.

2. Wrong Availment of SSI Exemption:
Regarding the wrong availment of SSI exemption for goods under brand names, the counsel argued that the applicant acted in good faith as they were unaware of the ownership arrangements between brand name owners. Citing a Supreme Court judgment in a similar case, the counsel contended that extended periods cannot be invoked when the arrangement is unknown to the assessee. The Tribunal agreed with this argument and ruled in favor of the applicant, noting that the Commissioner (Appeals) introduced different facts during the appeal process.

3. Clubbing of Clearances for SSI Exemption:
The issue of clubbing clearances for SSI exemption eligibility involved the contention that the brand name owners' clearances should be combined, affecting the franchisee's eligibility for the exemption. The counsel argued that the applicant was unaware of the arrangements between brand name owners and that suppression cannot be alleged against them. Referring to a Supreme Court decision, the counsel maintained that the applicant should not be penalized for unknown arrangements. The Tribunal concurred with this argument, emphasizing that the applicant's lack of awareness justified ruling in their favor.

4. Time-Barred Demand:
The counsel asserted that the entire demand was time-barred, supported by the submission of approved price and classification lists by the brand name owners. The absence of evidence indicating the applicant's knowledge of any suppression by the brand name owners further strengthened the argument. The Tribunal acknowledged the time-barred nature of the demand and considered the evidence presented by the counsel.

5. Appropriation of Refund Amount:
An amount had already been appropriated from a refund due to the applicant against the entire demand. The counsel requested this amount to be considered sufficient for the appeal process. The Tribunal noted this appropriation and deemed the deposited amount as satisfactory for admission of the appeal.

6. Brand Ownership for SSI Exemption Eligibility:
The debate over brand ownership for SSI exemption eligibility revolved around the assertion that the brand name owners were not eligible for the exemption, impacting the franchisee's claim. The Tribunal reviewed the arguments presented by both sides, including ownership details and eligibility criteria. It was highlighted that the Supreme Court's decision on brand ownership applied to group companies and not solely to franchisees, influencing the Tribunal's assessment.

In conclusion, the Tribunal ruled in favor of the applicant on various grounds, including insufficient evidence for clandestine removal, lack of awareness of ownership arrangements, time-barred demands, and adequate deposit for the appeal. The Tribunal also emphasized the importance of considering relevant legal precedents in reaching its decision.

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