2018 (8) TMI 1501 - AT - Central Excise

SSI Exemption - use of Brand Name - it was alleged that for calculation of gross value of clearances, the value of branded goods cleared by them was not considered - time limitation - Held that - There is no dispute as to the fact that the goods manufactured on 3rd party basis were affixed with the brand name of others. This factual position is not disputed by the appellant before the lower authorities or before us. If that be so, such clearances would definitely attract central excise duty as benefit of SSI exemption notification is not applicable to branded goods. The appellant has no case either on merits or on limitation - appeal dismissed - decided against appellant.

Summary

Issues:

1. Improper availing of SSI exemption Notification.
2. Calculation of gross value of clearances.
3. Demand of differential duty with interest and penalties.
4. Contesting show-cause notice on merits and limitation.
5. Discharging duty liability on goods manufactured under loan license and third-party basis.
6. Grounds for setting aside the demand.
7. Applicability of SSI exemption to branded goods.
8. Merits of the case and limitation.

Analysis:

The appeal in this case was against an order-in-appeal regarding the improper availing of SSI exemption Notification by the appellants who are manufacturers of PRP medicines. The issue revolved around the calculation of the gross value of clearances, where the value of branded goods cleared by them was not considered, leading to a show-cause notice for demand of differential duty, interest, and penalties on the appellant and Managing Director. The adjudicating authority confirmed the demands and penalties, which were contested on merits and limitation.

Upon appeal, the 1st Appellate Authority rejected the appellant's appeal but allowed the appeal of the individual Managing Director. The appellant argued that they manufactured goods under loan license bearing brand names and for third parties under trade names of others. They claimed to have discharged duty liability for goods manufactured under loan license but not for goods manufactured for third parties, believing they were eligible for exemption. They requested setting aside the demand due to a bonafide impression and regular audit of their accounts.

The Tribunal, after careful consideration, found that the appellant failed to make a case before the 1st Appellate Authority. It was established that goods manufactured for third parties bore brand names of others, making them liable for central excise duty as the SSI exemption did not apply to branded goods. The Tribunal concluded that the appellant had no case on merits or limitation. Therefore, the impugned order was deemed correct and legal, leading to the rejection of the appeal.

In conclusion, the judgment highlighted the importance of correctly interpreting exemption notifications and discharging duty liabilities, especially concerning the manufacturing of goods for third parties with branded names. The decision emphasized the need for compliance with excise duty regulations and the consequences of improper availing of exemptions.