2007 (9) TMI 71 - AT - Central Excise

Penalty Penalty imposed on appellant on the ground that they were dealing in branded goods of other party which is cleared under SSI exemption to which they not entitle but no evidence show that the appellant having any prior knowledge of such Penalty set aside u/s 209A of the CER,1944

Summary

Issues: Penalty imposition under Section 209A of Central Excise Rules, 1944 on the appellant for dealing in branded goods of a manufacturer not entitled to SSI exemption.

In this case, the appellant, a trader dealing in household electrical items, faced penalty imposition of Rs. 5 lakhs for dealing in branded goods of a manufacturer, M/s. Lalit Products, which were cleared under SSI exemption despite M/s. Lalit Products not being entitled to the exemption. The central issue revolved around whether the appellant had knowledge that the goods were liable to confiscation due to the misuse of the brand name "Cellonex" by M/s. Lalit Products. The Tribunal analyzed the evidence on record and found no proof indicating that the appellant, M/s. Hi-Tech Electronics, had knowledge that the brand name did not belong to M/s. Lalit Products or that they were evading duty. During investigation proceedings, M/s. Lalit Products themselves claimed ownership of the brand name. The Tribunal highlighted the absence of any statement from M/s. Lalit Products or others suggesting that the appellant was aware of the misuse of the brand name. Consequently, the Tribunal concluded that no penalty could be imposed on the appellant under Section 209A of the Act. The impugned order was set aside, and the appeal was allowed based on the lack of evidence demonstrating the appellant's knowledge of the wrongdoing, thereby absolving them of penalty liability.