2018 (4) TMI 1451 - AT - Central Excise

SSI exemption - use of Brand name of third party - N/N. 8/03-CE dated 01.03.2003 - Confiscation - redemption fine - penalty - Held that - Although, the appellant is exporting the said goods but the appellant has not followed any procedure i.e. payment of duty, and claiming the rebate claim or goods have been exported under bond. The fact is on record that out of total value of the goods of ₹ 4,76,080/- the goods worth ₹ 2,83,192/- are agriculture equipments on which, no duty is payable by the appellant - the total value of duty payable on the goods after abatement of ₹ 1,35,022/-, therefore, redemption fine and penalty imposed on the appellant are on higher side, and are to be reduced. Appeal allowed in part.

Summary

Issues:
- Seizure and confiscation of goods under SSI exemption Notification
- Allegation of using a third-party brand name
- Imposition of redemption fine and penalty
- Export of goods and duty payment

Analysis:
The appellant, a manufacturer of tractor and agricultural parts under the brand name 'Five Star Super Spares,' appealed against the seizure and confiscation of goods, allowing redemption on payment of fines and penalties. The dispute arose as the appellant was accused of using a third-party brand name, 'Five Star,' thereby being ineligible for the SSI exemption. The appellant contended that 'Five Star Super Spares' was their brand after exiting the partnership with the firm owning 'Five Star.' Additionally, they argued that the goods were meant for export, hence duty exemption applied. The appellant highlighted that a significant portion of the seized goods were agricultural implements not subject to duty, reducing the duty payable amount substantially.

The respondent supported the seizure, questioning the evidence of goods being meant for export and the appellant's status as an agricultural equipment manufacturer. The respondent emphasized the unauthorized use of a third-party brand name as a basis for denying SSI exemption. The tribunal considered both parties' arguments and noted the uncontested use of a third-party brand by the appellant. Consequently, the appeal focused on the excessive redemption fines and penalties imposed.

The tribunal found the appellant liable for confiscation due to using a third-party brand without duty payment procedures for export goods. Despite the goods being intended for export, the appellant failed to follow duty payment protocols or claim rebates, leading to the confiscation decision. However, recognizing the significant portion of duty-free agricultural goods seized, the tribunal deemed the redemption fines and penalties excessive. Consequently, the tribunal reduced the redemption fine to ?10,000 and the penalty to ?5,000, disposing of the appeal with revised terms.