9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (7) TMI 93 - HC - Central ExciseSSI exemption - use of brand name - The Assessee s claim is that since its clearances were always below the sum of Rs. 30.00 lakhs there is no need to register itself with the Central Excise Authorities - Whether the Tribunal is correct in dismissing the cross-objection filed by the appellant raising the question of limitation for the Revenue to make a demand? - Held that - the limit of exempted clearances increased in this period from Rs. 30.00 lakhs to Rs. 50.00 lakhs. The Assessee therefore in our view was entitled to contend that there was no occasion for it to disclose the fact that the subject goods were being cleared under the brand name Micro (which was also the brand name used by another family/sister concern) since it had no occasion to file a classification list. Suppression of facts - there was a non-disclosure of information by the Assessee. The Assessee has taken a stand that since it was always below the monetary limit fixed for clearances qua SSI Units it never had an occasion to make any disclosure via a classification list - Held that - this cannot be construed as suppression of fact within the meaning of Section 11A(1) of the 1944 Act. Mere non-disclosure of facts in such like circumstances cannot constitute suppression of facts. Given the way the Section is framed the expression suppression of fact appears in the company of words and expressions such as fraud collusion wilful misstatement. Therefore the expression suppression of facts has to take colour from the words whose company it appears in. A mere non-disclosure of information when there is no obligation in law to furnish the same will not amount to in our opinion fraud or collusion or even wilful misstatement and hence trigger the extended period of limitation. The Tribunal in our opinion wrongly rejected the cross objections filed by the Assessee on the issue of limitation. Since the extended period of limitation is not applicable the Revenue would also not be entitled to levy penalty under Section 11AC of the 1944 Act save and except demand duty for a period of of six (6) months prior to the date of SCN. Appeal allowed - decided in favor of assessee.
Issues Involved:
1. Whether the Tribunal was correct in dismissing the cross-objection filed by the appellant raising the question of limitation for the Revenue to make a demand. Detailed Analysis: Background and Procedural History: This appeal is directed against the judgment and order dated 10.05.2011, passed by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal). The Tribunal allowed the Revenue's appeal and dismissed the Cross Objection filed by the Assessee, reversing both the Order-in-original dated 31.10.2000 and the order of the First Appellate Authority dated 07.11.2003, which were in favor of the Assessee. The Assessee, aggrieved by this, preferred the present appeal. Legal Question:The appeal was admitted on 01.11.2011, with the primary question of law being whether the Tribunal was correct in dismissing the cross-objection filed by the appellant raising the question of limitation for the Revenue to make a demand. Facts:The Assessee manufactured chemicals for use in the printing and photographic industry and used the brand name "Micro," which was also used by its family/sister concern, Micro Plates Private Limited (MPPL). The Assessee claimed exemption from excise duty as a Small Scale Industrial Unit (SSI Unit) and did not register with the Central Excise Authorities, asserting that its clearances were always below Rs. 30.00 lakhs. The Central Excise Authorities issued a Show Cause Notice (SCN) dated 08.11.2000, proposing to deny the Assessee the exemption from excise duty and to levy duty of Rs. 4,19,575/- for the period between June 1997 and 25.10.2000, along with a penalty under Section 11AC of the Central Excise Act, 1944. The Adjudicating Authority, in its Order-in-Original dated 31.10.2001, ruled in favor of the Assessee, dropping the proceedings initiated via the SCN. The Revenue's appeal against this order was dismissed by the First Appellate Authority on 07.11.2003. The Revenue then appealed to the Tribunal, which reversed the decisions of the Adjudicating Authority and the First Appellate Authority. The Assessee also filed cross objections with the Tribunal, raising the issue of limitation. Arguments:Mr. G. Natarajan, representing the Assessee, conceded that the issue on merits was covered in favor of the Revenue by the Supreme Court's judgment in Commissioner of Central Excise, Trichy V. Grasim Industries Ltd., 2005 (183) E.L.T. 123 (S.C.). However, he argued that the Tribunal failed to consider that the extended period of limitation under Section 11A(1) of the 1944 Act could not be applied to the Assessee. He contended that the Assessee could only be liable for duty for a period of six months prior to the date of the SCN. Mr. A.P. Srinivas, representing the Revenue, argued that the extended period of limitation was applicable as the issue was neither contentious nor debatable. Findings:The Court noted that the Assessee had cleared its goods under the brand name "Micro," which was also used by MPPL. The brand name was coined by Mr. N.C. Shroff, father of Nitin Shroff, a Director of the Assessee. The family/sister concern had been using the brand name "Micro" since 1984, while the Assessee started using it in June 1997. The Assessee was not registered with the Central Excise Authorities and had not filed any classification list. Both the Adjudicating Authority and the First Appellate Authority had ruled in favor of the Assessee. The Tribunal's reversal was based on the application of the Supreme Court's judgment in Grasim Industries case, which interpreted the exemption notification to mean that any name or mark indicating a connection with another company would disqualify an Assessee from claiming exemption. The Tribunal also applied the Bombay High Court's decision in Ramply (India) Ltd., which held that non-declaration of the use of another's brand name amounted to suppression. The Court distinguished these judgments, noting that the Assessee's non-disclosure was not suppression of facts within the meaning of Section 11A(1) of the 1944 Act. The Assessee had no obligation to disclose the use of the brand name "Micro" as it was always below the monetary limit for SSI Units and had no occasion to file a classification list. The Court cited several judgments supporting this view, including UOI V. Sonnenflex Abrasives Pvt. Ltd. and CCE V. Wonderax Laborataries, IPL. Conclusion:The Court concluded that the Tribunal erred in not examining the aspect of limitation and wrongly rejected the cross objections filed by the Assessee. The impugned judgment and order of the Tribunal were set aside. The question of law was answered in favor of the Assessee and against the Revenue. The Revenue was entitled to recover duty for the period of six months prior to the date of issuance of the SCN, but not to levy a penalty under Section 11AC of the 1944 Act. The Civil Miscellaneous Appeal was disposed of in these terms, with no order as to costs.
|
