2018 (11) TMI 1815 - AT - Central Excise

SSI exemption - use of brand name of others - Alleging that placing of the vegetables cuisine rice roti salad etc. on a tray and placing the leaflets bearing the logo as well as the name of Ambassador Sky Chef in the cutlery pack placed on the tray amounting to food preparation bearing brand name and accordingly classifiable under Heading 2108.99 upto 28.02.2005 and under Tariff Item 2106 9099 thereafter - demand of duty alongwith interest and penalty - HELD THAT - The issue has been considered by this Tribunal at length in Taj Sats Air Catering s case 2016 (3) TMI 777 - CESTAT NEW DELHI where it was held that the Original Authority found that the appellants are supplying food preparations with brand-name to the airlines. Admitted facts are that the food prepared by the appellants is supplied without brand-name. In separate tray is the cutlery pouch which contains the label with logo and name of the appellant. The same is supplied separately. These are put together by the airline staff and served to the passengers. In any case since the Department has not established the sustainability of the demand on the ground of manufacture this aspect on brand name is not further examined by us. There are no reason to deviate from the observation of the Tribunal in the aforesaid case which has been consistently followed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Classification of food items supplied to airlines
- Liability for Central Excise duty
- Time-bar for issuing demand-cum-show cause notice

Classification of Food Items Supplied to Airlines:
The appeal involved a dispute over the classification of food items supplied to airlines by the appellant. The appellant argued that the items supplied were not liable to Central Excise duty as they were prepared and packed separately before being assembled on board by airline staff. The Tribunal noted that the appellant supplied various items separately, such as roti, rice, curry, and cut fruits, which were not branded when cleared from their premises. The Tribunal found that it was not legally sustainable to tax the entire meal tray as edible preparations, as the final assembly occurred on board. The Revenue's case of taxing the items under a brand name was not established, as the items were not branded when supplied by the appellant.

Liability for Central Excise Duty:
The Tribunal observed that the Revenue failed to establish the liability of the appellant for manufacturing branded food preparations. The demand for Central Excise duty was based on the full value of the complete food tray served to passengers, rather than on the specific items prepared by the appellant. The Tribunal concluded that the demand was not sustainable as the Revenue did not provide evidence to support the taxability of the complete food tray. Additionally, the issue of brand-name was not further examined due to the lack of sustainability in the demand based on manufacturing activities.

Time-Bar for Issuing Demand-Cum-Show Cause Notice:
Regarding the time-bar for issuing the demand-cum-show cause notice, the Tribunal found that the notice was issued after an extended period, alleging suppression of facts by the appellant. However, the Tribunal noted that there was no substantial ground to justify the extended period, as there was no evidence of fraud or intention to evade payment of duty. The Tribunal referenced a similar case where the demand after many years was deemed unsustainable due to the lack of evidence supporting suppression of facts. Consequently, the Tribunal held that the demand for the extended period was not justified in the present case, given the nature of the dispute and the lack of evidence supporting the allegations.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal with consequential relief, if any, in accordance with the law. The judgment relied on previous decisions and established principles, emphasizing the importance of proper classification, liability determination, and time-bar considerations in Central Excise matters.