2007 (7) TMI 146 - AT - Central Excise

Brand name of others SSI exemption Job-worker availing SSI exemption has exceeded the SSI limit on its own Duty must be paid by job-worker using brand name of appellant not by the appellant himself Demand sustainable on job-worker Confiscation is legal

Summary

Issues:
- Allegation of exceeding small scale exemption limit by the appellant firm during 1994-95 to 1997-98.
- Duty demand on industrial valves cleared by job workers without payment.
- Penalty imposition on job workers.
- Demand on seized industrial valves.
- Appeal against the original authority's order by the appellant firm and its proprietor.
- Refund claim by the appellant.
- Confiscation of non-duty paid valves and redemption requirement.

Analysis:
1. Allegation of Exceeding Small Scale Exemption Limit:
The Tribunal noted an allegation that the appellant firm had exceeded the small scale exemption limit during the period 1994-95 to 1997-98. The demand for duty was raised by the job workers, M/s Jain Trading Company and M/s Modi and Modi Engineering, who had manufactured and cleared industrial valves with the brand name "Prime" belonging to the appellant. However, since the job workers were not part of the appeal, the Tribunal refrained from deciding on their eligibility for the small scale exemption.

2. Duty Demand on Industrial Valves Cleared by Job Workers:
The original authority confirmed a duty demand of Rs. 3,50,021 on prime industrial valves cleared by the job workers without payment of duty. Additionally, a penalty equal to the duty amount was imposed on the job workers. The Tribunal acknowledged the duty payment of Rs. 1 lakh made by the appellant as a buyer of the goods with the brand name "Prime" from the job workers. It clarified that the duty was legally not payable by the appellant but by the job workers themselves. Any refund claim by the appellant should be processed according to the law.

3. Penalty Imposition on Job Workers:
The original authority imposed penalties on M/s Jain Trading Company and M/s Modi and Modi Engineering for clearing industrial valves without paying duty. The Tribunal's decision did not address the penalty imposition directly, as the job workers were not part of the appeal proceedings.

4. Demand on Seized Industrial Valves:
There was a demand of Rs. 5,581 on 91 numbers of "Prime" brand industrial valves that were seized. The Tribunal confirmed the confiscation of these non-duty paid valves valued at Rs. 1,86,024. The person seeking redemption for these confiscated goods was required to pay the duty amounting to Rs. 5,581, which the Tribunal deemed as liable for confirmation.

5. Appeal Against Original Authority's Order:
The appeal filed by M/s. Prime Blue manufacturing company Ltd. and its proprietor against the original authority's order was disposed of by the Commissioner through an order dated 8-10-03. The Commissioner set aside the separate penalty on the proprietor while rejecting other aspects of the appeals.

6. Refund Claim by the Appellant:
If the appellant had made a refund claim for the duty paid on behalf of the job workers, the Tribunal directed that the claim should be processed in accordance with the applicable laws.

7. Confiscation of Non-Duty Paid Valves and Redemption Requirement:
The Tribunal confirmed the legality of the confiscation of the 91 non-duty paid valves and upheld the requirement for the person seeking redemption to pay the duty amount of Rs. 5,581 for the confiscated goods.

In conclusion, the Tribunal disposed of the appeal based on the considerations outlined above, emphasizing the legal obligations regarding duty payments, confiscation of goods, and the processing of refund claims.