2019 (3) TMI 946 - AT - Central Excise

SSI Exemption - use of brand name of other person - Sudarshan - N/N. 08/03-CE dated 01.03.2003 - Held that - The lower authorities have not properly considered the verification report, invoice and relevant documents. As regard 5 machines which appellant had claimed that the same is not bearing the brand name of Sudarshan i.e. of another person, whereas 5 machines are bearing name of Mohansons of their own, therefore, on these 5 machines no demand should have been confirmed. However, both the authorities have not properly verified these documents and given proper findings, therefore this needs to be re-considered by the adjudicating authority and demand should be re-quantified - matter on remand. Cum duty benefit - Held that - It is settled law as held in Hon ble Supreme Court judgment in case of M/s Maruti Udyog Ltd 2002 (2) TMI 101 - SUPREME COURT , whenever demand is confirmed, the cum duty should be extended to the assessee, accordingly, we hold that appellant is entitled for the cum duty benefit. Penalty u/s 11AC - Held that - Since both the lower authorities have not considered the option of 25% penalty as provided under proviso to Section 11AC and the same can be re-considered. Penalty on partner - Held that - Since the partnership firm has been penalised, no separate penalty can be imposed on the partner as held by Hon ble Gujarat High Court in case of M/s Pravin N. Shah Vs. CESTAT 2012 (7) TMI 850 - GUJARAT HIGH COURT , therefore, penalty on partner is set aside. Appeal allowed in part and part matter on remand.

Summary

Issues involved: Determination of entitlement for SSI exemption under Notification No. 08/03-CE for products bearing another person's brand name, re-quantification of demand for machines bearing different brand names, consideration of cum duty benefit, penalty imposition under Section 11AC, and penalty on partner in a partnership firm.

Analysis:
1. Entitlement for SSI Exemption: The primary issue revolved around whether the product manufactured by the appellant, bearing the brand name of another person 'Sudarshan,' qualified for SSI exemption under Notification No. 08/03-CE dated 01.03.2003. The appellant's counsel argued that out of 13 machines cleared, 5 were under their own brand, while the remaining 8 bore the 'Sudarshan' brand. The appellant admitted the demand for the 8 machines bearing the other brand but contested the demand for the 5 machines under their own brand. The Tribunal found discrepancies in the verification process and directed the adjudicating authority to re-assess the demand for the machines not bearing the 'Sudarshan' brand.

2. Re-Quantification of Demand: The Tribunal noted that proper verification of documents, including invoices and reports, was lacking in determining the machines not bearing the 'Sudarshan' brand. As per the appellant's submissions and supporting case law, demand re-quantification was necessary for the 5 machines bearing their own brand name 'Mohansons.' The Tribunal emphasized the need for a thorough review by the adjudicating authority to ensure accurate assessment.

3. Consideration of Cum Duty Benefit: Citing the precedent set by the Hon'ble Supreme Court in the case of M/s Maruti Udyog Ltd, the Tribunal ruled in favor of extending cum duty benefit to the appellant. It was established that when a demand is confirmed, the cum duty should be granted to the assessee. Therefore, the appellant was deemed entitled to the cum duty benefit in alignment with the legal principles outlined in the mentioned case law.

4. Penalty Imposition under Section 11AC: The Tribunal highlighted the oversight by lower authorities in not considering the option of a 25% penalty as provided under the proviso to Section 11AC. Drawing support from the Hon'ble Supreme Court judgment in the case of M/s R.A. Shaikh Papers Mills Pvt. Ltd, the Tribunal directed a re-evaluation of the penalty imposition. It was determined that the appellant should be given the option of a 25% penalty concerning the total duty to be re-quantified by the adjudicating authority.

5. Penalty on Partner in Partnership Firm: In line with legal precedents, including judgments from the Hon'ble Gujarat High Court, the Tribunal ruled that since the partnership firm had already been penalized, no separate penalty could be imposed on the partner. The penalty on the partner was consequently set aside, and the appeal of the partner was allowed. The matter regarding the partnership firm was remanded to the adjudicating authority for the re-quantification of demand, considering cum duty benefit and the 25% penalty option.