2013 (11) TMI 1418 - AT - Central Excise

Benefit of SSI Exemption under Notification No.1/93 Brand name not own by the person using it Held that - If a brand name is not owned by any particular person, the use will not deprive a unit of the benefit of the small scale exemption scheme - This applies not only to locks but to all other goods specified in Notification No. 1/93 - the brand name AVON is being used by the partnership concerns of the same family - It has not been established by the investigation that the brand name AVON belongs to any other person Relying upon CCE Vs Minimax Industries 2011 (1) TMI 782 - DELHI HIGH COURT and on CBEC Circular No. 52/52/94-CX, dt.01.09.1994 - when the brand name does not belong to any person, then the manufacturers using such brand name are eligible for exemption under Notification No.1/93. Time barred demand Held that - The appellants filed suitable declarations under Rule 174 of the Central Excise Rules and Notification No.1/93-CE, dt.28.02.1993 - It cannot be held that there was any suppression on the part of the appellants with intention to evade duty - The reason given by the first appellate authority that appellants did not declare the use of brand name AVON in the declaration filed with the Department amounts to suppression with intention to evade duty, is not correct because the appellants can be under bonafide belief that the brand name AVON did not belong to any other person and that they were eligible to small scale exemption thus, it cannot be considered that the appellants suppressed any information with intention to evade Central Excise duty Decided in favour of Assessee.

Summary

Issues:
1. Whether the benefit of small scale exemption under Notification No.1/93-CE, dt.28.08.1993 is admissible to the appellant for affixing a brand name 'AVON'?
2. Whether the declarations filed by the appellants were within the time limit specified under Rule 174 of Central Excise Rules and Notification No. 1/93-CE, dt.28.02.1993?

Issue 1:
The main issue in this case was whether the appellant was entitled to the benefit of small scale exemption under Notification No.1/93-CE for using the brand name 'AVON'. The lower authorities had denied the exemption, stating that the brand name belonged to another entity, M/s Wel-Tech Electronics, Jamnagar. The appellant argued that the brand name 'AVON' was used by a partnership firm of the appellant's family, citing judgments from the Hon'ble High Court of Delhi and Delhi Bench of CESTAT. The appellant also referred to a CBEC circular clarifying that manufacturers using a brand name not owned by any person are eligible for the exemption. The Tribunal analyzed various judgments and concluded that the benefit of the exemption could not be denied to the appellants as the brand name 'AVON' was used by the family partnership, and no other owner of the brand name was established.

Issue 2:
Regarding the limitation aspect, the appellant contended that the required declarations under Rule 174 of Central Excise Rules and Notification No. 1/93-CE were filed within the specified time, making the demands time-barred. The first appellate authority had argued that the appellants did not declare the use of the brand name 'AVON' in the filed declarations, indicating suppression with the intent to evade duty. However, the Tribunal disagreed, stating that the appellants might have genuinely believed they were eligible for the exemption as the brand name did not belong to any other person. The Tribunal also noted a CBEC circular clarifying that manufacturers using a brand name not owned by any person are eligible for the exemption. Consequently, the appeals were allowed on merit as well as on the limitation issue.

In conclusion, the Tribunal allowed the appeals filed by the appellants, granting them the benefit of the small scale exemption under Notification No.1/93-CE for using the brand name 'AVON' and rejecting the argument of suppression with the intent to evade duty regarding the time limit for declarations.