2008 (3) TMI 6 - SC - Central Excise

Benefit of SSI Exemption Use of Brand Name of a company in Germany the contention of appellant that he has bonafide belief that brand name was not belonging to others and was entitled to avail the benefit therefore the extended period of limitation should not be invoked is not sustainable.

Summary

Issues:
1. Benefit of exemption under Notification No. 175/86-CE for goods cleared under the brand name "Tetenal."
2. Mis-statement and suppression of facts by the assessee to evade payment of duty.
3. Applicability of extended period of limitation under Section 11A(1) of the Central Excise Act, 1944.
4. Determination of assessable value of goods under Section 4(4) (d) (ii) of the Act.

Issue 1: Benefit of Exemption under Notification No. 175/86-CE
The case involved the assessee, engaged in manufacturing photographic chemicals, claiming exemption under Notification No. 175/86-CE for goods cleared under the brand name "Tetenal." The investigation revealed that the brand name belonged to a German entity, not the assessee. The Tribunal held that the assessee was not entitled to the exemption, leading to an appeal by the assessee.

Issue 2: Mis-statement and Suppression of Facts
The department alleged that the assessee mis-stated and suppressed facts to evade duty payment on goods cleared under the brand name "Tetenal." The Commissioner confirmed the duty demand and imposed a penalty under Rule 173Q of the Central Excise Rules, 1944. The assessee contended that they believed they were entitled to the exemption, as the brand name was declared in their classification list. However, the investigation revealed that the brand name belonged to their German collaborator.

Issue 3: Applicability of Extended Period of Limitation
The Tribunal held that the demand of duty was not barred by time and invoked the extended period of limitation under Section 11A(1) of the Act. The assessee challenged this decision, but the Tribunal upheld the invocation of the extended period of limitation due to willful mis-statement and suppression of facts by the assessee.

Issue 4: Determination of Assessable Value
The assessee argued that the duty element should be deducted from the sale price for determining the assessable value of goods under Section 4(4) (d) (ii) of the Act. The Tribunal accepted this plea, citing relevant case law, and remanded the case to re-determine the duty payable based on this provision.

In conclusion, the Supreme Court dismissed both appeals, upholding the decisions regarding the exemption, mis-statement of facts, application of extended period of limitation, and determination of assessable value. The parties were left to bear their own costs.