2008 (3) TMI 240 - AT - Central Excise

Appellant, job-worker, charitable-society - during the period from 01.04.2004 to 23.04.2004, appellant cleared goods bearing the brand name of other appellant plea is that they stopped using the brand name after getting instruction from principal - SCN demands duty on clearances which did not bear any brand name on them - demand on other products should be limited only for the period from 01.04.2004 to 23.04.2004 since appellant is charitable society, penalty is not justified

Summary

Issues:
- Duty demand and penalty under Section 11AC imposed by lower authority
- Appeal against Order-in-Appeal No. 391/06-CE dated 18.08.2006
- Interpretation of Circulars issued by M/s. Manjilas Rice Mills regarding brand name usage
- Dispute over brand name usage on products for different periods
- Justification of duty demand and penalty

Analysis:
The case involved an appeal against an Order-in-Appeal regarding duty demand and penalty imposed by the lower authority. The appellants were engaged in manufacturing food products on a job work basis and faced proceedings initiated by a Show Cause Notice demanding duty for goods cleared during a specific period. The Commissioner (Appeals) confirmed the duty demand but reduced the penalty. The main contention was the usage of the brand name 'Double Horse' on products, with the appellants arguing that it was only used for a certain period, supported by Circulars from M/s. Manjilas Rice Mills.

The appellants argued that the brand name 'Double Horse' was used only for products cleared between specific dates, while the lower authorities believed otherwise. The Commissioner (Appeals) found the Circulars unconvincing, stating that the appellants had admitted using the brand name earlier than claimed. However, the Circulars clearly instructed the appellants to use the brand name 'Double Horse' for a limited period, providing a basis for the appellants' argument. The second Circular even mentioned the cessation of using the brand name due to Central Excise directions after a visit on 23rd April, 2004.

Upon careful consideration, the Tribunal found merit in the appellants' argument based on the Circulars. The conclusion was that the demand for duty on products not bearing the brand name 'Double Horse' should be limited to a specific period mentioned in the Circulars. Therefore, the demand was set aside, and the penalty imposed was also overturned, considering the nature of the appellant unit. The appeal was allowed, and the appellant was directed to pay the recomputed amount promptly. The judgment was pronounced on 24.03.2008 by the Tribunal.