2007 (9) TMI 165 - AT - Central Excise

Bonafide belief of assessee is that use of word In technical collaboration does not mean use of brand name of others SSI unit Discontinuance of use of above inscription not disputed Held that demand within time limit is upheld but demand for extended period of limitation is set aside.

Summary

Issues:
1. Eligibility for small scale industries exemption due to affixation of brand name.
2. Time bar for demand of duty and imposition of penalties.
3. Discontinuation of use of brand name inscription during the relevant period.

Issue 1:
The case involved appeals against the denial of small scale industries (SSI) exemption to the appellants due to affixation of their finished goods with a label containing the inscription "In Technical Collaboration with Sonnenflex Schleifmittelwerk, West Germany." The appellants argued that they were under a bona fide belief that this inscription did not constitute affixation of a brand name. The tribunal referred to a previous case law and held that if the appellants had a genuine belief that the affixation did not disentitle them from SSI benefits, the extended period for demand of duty could not be invoked. The tribunal set aside the demand for the extended period and remanded the matter for quantification of duty within the limitation period.

Issue 2:
Regarding the time bar for demand of duty and penalties, the tribunal found that the appellants had filed declarations with the authorities during the relevant period indicating their claim for SSI benefits. The tribunal held that the appellants' belief that the inscription did not amount to affixation of a brand name was genuine. Therefore, the tribunal set aside the penalties imposed on the appellants as there was no intention to evade duty. The tribunal allowed the appeal on the ground of limitation and remanded the matter for quantification of duty within the prescribed period.

Issue 3:
In the case of other appeals where the appellants had discontinued the use of the brand name inscription, the tribunal found that the revenue had not provided any evidence to show that the appellants continued to use the inscription during the relevant period. The tribunal held that the lower authorities erred in confirming the demand and penalties in these cases. Consequently, the tribunal allowed these appeals and set aside the impugned orders, providing consequential relief to the appellants.

In conclusion, the tribunal allowed the appeal in one case based on limitation, set aside penalties due to lack of intent to evade duty, and allowed other appeals due to the discontinuation of the brand name inscription without evidence of its use during the relevant period.