2008 (4) TMI 146 - AT - Central Excise

SSI exemption demand on ground of use of brand name of others - no brand name was affixed on the goods, nor was any brand name affixed on the cartons which were used as packing material for the goods - assessee had availed the benefit of SSI exemption notification after filing the requisite declaration with the department - assessee s plea of bona fide belief that they were not barred from availing SSI benefit stands proved hence larger period is not invocable demand is time barred

Summary

Issues involved:
Admissibility of SSI benefit, invocation of extended period of limitation under Section 11A, remand order scope, suppression of facts, duty liability, bona fide belief, penalty imposition under Section 11AC.

Analysis:

1. Extended period of limitation and denial of SSI benefit:
The case involved a show-cause notice confirming a duty demand against the assessee for the period September 1997 to May 1998, with an equal penalty, due to the denial of SSI benefit for goods cleared under another person's brandname. The extended period of limitation under Section 11A was invoked based on the alleged wilful suppression of facts to evade duty payment. The Commissioner (Appeals) initially sustained the duty demand but vacated the penalty. The Tribunal's remand order focused on reevaluation of the limitation issue.

2. Reevaluation of limitation issue:
Post the remand, the Commissioner (Appeals) upheld the duty demand for the extended period, citing deliberate suppression by the assessee. The Tribunal's analysis revealed the ineligibility of the assessee for SSI benefit concerning the disputed period, settling the duty liability. The main contention in the appeal was the scope of the remand order, with the assessee arguing that the Commissioner (Appeals) should have limited the duty demand to the normal six-month period. However, the Tribunal clarified that the remand was for a fresh decision on the limitation issue, which the lower appellate authority correctly addressed.

3. Bona fide belief and suppression allegation:
The Tribunal considered the assessee's argument that their belief in being entitled to SSI benefit due to the absence of the brandname on the goods or packing material was genuine. It was noted that the assessee had declared their intention to avail the SSI exemption but did not disclose the use of another person's brandname. The Tribunal found merit in the assessee's bona fide belief, concluding that the failure to disclose was not an intentional evasion of duty but stemmed from their genuine understanding of the brandname issue.

4. Decision and outcome:
Based on the above analysis, the Tribunal set aside the duty demand for the extended period, ruling that duty could only be demanded for up to six months. Consequently, since the duty demand for the extended period was annulled, the imposition of penalty under Section 11AC was deemed unnecessary, leading to the dismissal of the Revenue's appeal.

In conclusion, the Tribunal's judgment focused on the interpretation of the remand order, the genuineness of the assessee's belief regarding SSI benefit eligibility, and the absence of intentional suppression of facts. The decision highlighted the importance of bona fide belief in determining liability and duty demands, ultimately resulting in the allowance of the assessee's appeal and the dismissal of the Revenue's appeal.