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2018 (9) TMI 983 - AT - Central ExciseSSI Exemption - use of Brand name of customers - Bonafide belief - time limitation - Held that - The declaration of law by the Hon ble Supreme Court in the case of Kohinoor Elastics Pvt.Ltd. 2005 (8) TMI 115 - SUPREME COURT OF INDIA , the larger Bench s decision of the Tribunal in the case of Prakash Industries vs. CCE, BBSR 2000 (5) TMI 59 - CEGAT, COURT NO. III, NEW DELHI stands not approved and over-ruled. This leads to an inevitable conclusion that prior to the decision in the case of Kohinoor Elastics, the earlier decisions of the Tribunal including the one of larger Bench in the case of Prakash Industries were in favour of the assessee - there would be a bona fide belief on the part of the appellant as regards the availability of small scale exemption Notification. In the absence of any evidence to reflect upon the assessee s mala fide, invocation of longer period is not justified - Penalty also set aside. A part of the demand may fall within the limitation period for which the matter is remanded to the original adjudicating authority for re-quantification - appeal allowed by way of remand.
Issues:
1. Availment of S.S.I. Exemption by the appellant for goods endorsed with the brand name of customers. 2. Validity of the show cause notice invoking the extended period. 3. Interpretation of Notification No.8/2003-CE regarding exemption for branded goods. 4. Imposition of penalty on the appellant. Issue 1: Availment of S.S.I. Exemption The appellant, engaged in manufacturing fuel tanks and gear covers for diesel engines, faced proceedings as Revenue contended that availing S.S.I. Exemption was not permissible due to the goods being endorsed with customers' brand names. The original adjudicating authority confirmed the duty demand and imposed penalties, which were upheld by the Commissioner (Appeals), leading to the present appeal. Issue 2: Validity of Show Cause Notice The appellant's advocate challenged the impugned order on the grounds of limitation, citing Board's Circular No.71/71/94-CX and the appellant's bona fide belief in compliance. The Tribunal noted the withdrawal of the Circular in 2008 and emphasized the necessity of following legal provisions despite past interpretations, leading to the remand of the matter for re-quantification within the limitation period. Issue 3: Interpretation of Notification No.8/2003-CE The Tribunal referred to the Supreme Court's decision in Kohinoor Elastics Pvt. Ltd. v. Commissioner of Central Excise, Indore, establishing that the benefit of small scale Notification is not available if goods are endorsed with customers' brand names for further use in their final products. The Tribunal overruled previous decisions in favor of the assessee, emphasizing the need for compliance with legal provisions and rejecting the appellant's arguments based on distinctions between different notifications. Issue 4: Imposition of Penalty Considering the appellant's bona fide belief in compliance prior to the Supreme Court's decision, the Tribunal found no justification for imposing penalties, thus setting aside the entire penalty imposed on the appellant. In conclusion, the Tribunal held that while the appellant's belief in compliance was considered bona fide, penalties were unjustified, and the demand beyond the normal limitation period was barred. The matter was remanded for re-quantification within the limitation period, and the penalty was set aside.
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