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2011 (12) TMI 443 - AT - Central ExciseWaiver of pre-deposit of duty - Denial of the benefit of small scale exemption Notification No. 8/2003-C.E., dated 1-3-2003 - Held that - applicants have produced documentary evidence that KGM Associates sold the brand name with the mould to KGM Exports. That transaction has been reflected in the books of account and sales tax was also paid on the tansaction. In these circumstances, we find that the applicants have made out a strong prima facie case for waiver of pre-deposit of duty, interest and penalty. Therefore, the pre-deposit of duty, interest and penalty is waived during pendency of the appeals - Stay granted.
Issues:
Waiver of pre-deposit of duty, interest, and penalty based on the denial of small scale exemption Notification No. 8/2003-C.E. to M/s. KGM Exports due to the brand name ownership dispute with M/s. KGM Associates. Analysis: The applicants, M/s. KGM Exports, sought waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 10,66,568/-, as the demand was confirmed on them by denying the benefit of small scale exemption Notification No. 8/2003-C.E. The Revenue contended that M/s. KGM Associates and M/s. KGM Exports are closely associated, alleging that the brand name belongs to M/s. KGM Associates, thus disqualifying M/s. KGM Exports from the Notification's benefit. It was highlighted that a sale deed was executed between the two entities in May 2004, but doubts were raised regarding the authenticity of the stamp paper used for the deed. Additionally, it was pointed out that goods manufactured by M/s. KGM Exports were supplied to M/s. KGM Associates, and the former had applied for registration of the brand name, which was still pending. The Tribunal examined the documentary evidence presented by the applicants, demonstrating that M/s. KGM Associates had indeed sold the brand name along with the mould to M/s. KGM Exports, with the transaction being duly recorded in the books of accounts and sales tax paid accordingly. In light of this evidence, the Tribunal found that the applicants had established a strong prima facie case for the waiver of pre-deposit of duty, interest, and penalty. Consequently, the Tribunal granted the waiver, allowing the stay petitions filed by M/s. KGM Exports during the pendency of the appeals.
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