2015 (10) TMI 1988 - AT - Central Excise

SSI Exemption - clearance of the goods, bearing in the brand name of the loan licensees - Clubbing of clearances - Held that - assessee paid the duty on the goods bearing brand name of the loan licensees. - Duty paid on the branded goods is more than duty now being demanded, should neutralize entire demand required to be verified and matter was remanded. - In the case of Pharmanza (India) (2009 (1) TMI 556 - CESTAT, AHMEDABAD), the Tribunal dropped the demand for the extended period of limitation on the identical situation. Hence, we do not find any merit in the appeal filed by the Revenue. As there is no suppression of fact, penalty imposed under Section 11 AC cannot be sustained. - Matter remanded back - Decided in favour of Revenue.

Summary

Issues:
1. Entitlement to SSI exemption for clearance of goods bearing brand name to loan licensees.
2. Demand of duty, interest, and penalty by Adjudicating Authority.
3. Appeal against the impugned order by both Revenue and assessee.
4. Application of duty paid on branded goods against the duty demanded.

Entitlement to SSI Exemption:
The case involved the question of whether the appellant was entitled to avail the SSI exemption for clearing goods bearing the brand name of loan licensees. The Revenue argued that the appellant should have availed the exemption based on the unit's location in rural areas. The Tribunal analyzed the situation and found that the appellant had indeed paid duty on goods bearing the brand name of the loan licensees. The Tribunal referred to previous decisions, including the case of Pharmanza (India), to support the appellant's position that the duty paid on branded goods should neutralize the duty demanded.

Demand of Duty, Interest, and Penalty:
The Adjudicating Authority had confirmed a demand of duty along with interest and imposed a penalty on the appellant. However, the Commissioner (Appeals) dropped the demand for duty and interest for the extended period of limitation and reduced the penalty amount. Both the Revenue and the assessee filed appeals against the impugned order, leading to a detailed examination of the facts and legal arguments presented by both sides.

Application of Duty Paid on Branded Goods:
The Tribunal, after considering the arguments and precedents cited by the appellant's counsel, agreed that the duty paid on branded goods should be adjusted against the duty now being demanded. The Tribunal highlighted that the duty paid on branded goods exceeded the duty being demanded, potentially neutralizing the entire demand. As a result, the matter was remanded to the original adjudicating authority for further examination to ensure proper adjustment of the duty amounts.

Conclusion:
The Tribunal disposed of both appeals by directing the Adjudicating Authority to verify whether the duty being demanded would be neutralized by the duty already paid by the appellant. The appeal filed by the Revenue was rejected, and the appeal filed by the assessee was disposed of accordingly. The Tribunal emphasized the importance of proper verification and adjustment of duty amounts in line with the legal principles discussed during the proceedings.