2019 (1) TMI 817 - AT - Central Excise

Method of Valuation - Section 4 or 4A of CEA - relays manufactured and cleared - N/N. 9/2002-CE dated 1/3/2002 and 8/2003-CE dated 1/3/2003 - request of cross examination denied - whether the relays manufactured and cleared by the appellant are to be assessed under Section 4 of the Central Excise Act, 1944 as claimed by the appellants or under Section 4A as claimed by the revenue? - penalty under Section 11AC - extended period of limitation. Held that - The issue in respect of manner of assessment of Relays sold in the manner as have been cleared by the Appellants is no longer res-integra. Tribunal has in case of Schneider Electrical India (P) Ltd vs Commissioner Central Excise Nashik 2014 (1) TMI 1642 - CESTAT MUMBAI , where it was held that the appellants are required to affix MRP on the impugned goods. It is an admitted fact the appellants were using the brand name on their goods which did not belonged to them but was owned by someone else - the benefit of exemption under Notification No 9/2002-CE dated 1/3/2002 and 8/2003-CE dated 1/3/2003 has been correctly denied to the appellants. Cross-examination of witnesses - Held that - The purpose of cross examination is to give opportunity to the person against whom the case has been made out to challenge the evidences produced against him by way of such depositions made and relied upon by the revenue. The purpose of cross examination is not for the acceptance of the evidence by the accusing department (revenue) but to provide opportunity to the accused to test the correctness of depositions made against him and bring out the truth - The view of Commissioner stating that because the depositions made by the sub dealers is acceptable to him, cannot be ground for denying the opportunity of cross examination to the appellants - In case the person whose cross examination is sought is not available or cannot be made available, Commissioner should inform the appellant and also make a specific mention of the same in the order that he will issue. Extended period of limitation - penalty - Held that - Since issue of limitation has not been adjudged by either the adjudicating authority or Commissioner (Appeal), the matter needs to be remanded back to the adjudicating authority for consideration of the issue on limitation - Since the matter in respect of determination of extended period of limitation is being remanded to the original authority the issue in respect of imposition of penalty under Section 11AC is also remanded to the same authority. Appeal allowed by way of remand.

Issues Involved:
1. Assessment of "Relays" under Section 4 or Section 4A of the Central Excise Act, 1944.
2. Eligibility for exemption under Notification No 9/2002-CE and 8/2003-CE.
3. Denial of cross-examination request by the Commissioner.
4. Invocation of the extended period of limitation under Section 11A(1).
5. Imposition of penalty under Section 11AC.

Detailed Analysis:

1. Assessment of "Relays" under Section 4 or Section 4A of the Central Excise Act, 1944:
The primary issue was whether the relays manufactured and cleared by the appellants should be assessed under Section 4 or Section 4A of the Central Excise Act, 1944. The Tribunal referred to the case of Schneider Electrical India (P) Ltd vs Commissioner Central Excise Nashik, where it was held that the assessment of goods notified under Section 4A should be done under that section. Despite the appellants' argument that the relays were meant for industrial use and thus exempt from SWMR, the Tribunal upheld the assessment under Section 4A, as the relays were sold in retail markets, requiring MRP declaration as per the Controller of Legal Metrology's clarification.

2. Eligibility for exemption under Notification No 9/2002-CE and 8/2003-CE:
The appellants were found to use the brand name "PLA RELAYS," which did not belong to them but to another entity. The Commissioner noted that the exemption under Notification No 9/2002-CE and 8/2003-CE does not apply to goods bearing a brand name of another person. The Tribunal, citing the Supreme Court's decisions in Kohinoor Elastics (P) Ltd. and Parle Bisleri Ltd., upheld the denial of exemption, emphasizing that the use of another's brand name disqualifies the appellants from claiming the exemption.

3. Denial of cross-examination request by the Commissioner:
The Commissioner denied the appellants' request for cross-examination of sub-dealers and panchas, stating that their depositions were supportive of the department's view. The Tribunal found this denial erroneous, stressing that cross-examination is essential for ensuring fairness and testing the correctness of depositions. The matter was remanded back to the Commissioner to reconsider the cross-examination request.

4. Invocation of the extended period of limitation under Section 11A(1):
In the appeal concerning the order dated 14.10.2013, the Commissioner (Appeal) set aside the adjudicating authority's order without addressing the extended period of limitation. The Tribunal remanded the matter back to the adjudicating authority to consider the applicability of the extended period of limitation as per the proviso to Section 11A(1).

5. Imposition of penalty under Section 11AC:
The revenue's appeal argued that the Commissioner (Appeal) failed to impose a penalty under Section 11AC despite setting aside the adjudicating authority's order. The Tribunal noted that the imposition of a penalty under Section 11AC is linked to the decision on the extended period of limitation. Citing the Supreme Court's decision in Rajasthan Spinning Mill, the Tribunal remanded the issue of penalty back to the adjudicating authority for reconsideration.

Conclusion:
- Appeal No E/1143/2009: Dismissed.
- Appeal No E/90/2010 & E/91/2010: Allowed by remand for reconsideration of cross-examination requests.
- Appeal No E/89384/13 & E/89476/13: Remanded to the adjudicating authority for determination of the extended period of limitation and related penalties.

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