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2019 (7) TMI 326 - AT - Central ExciseSSI Exemption - manufacture of branded goods - owner of brand name FIBA - brand name HARDWYN assigned - benefit of N/N. 8/2003-CE, dt.01.03.2003, as amended - time limitation - imposition of penalty - HELD THAT - The appellant assessee is manufacturing excisable goods with brand names HARDWYN and FIBA. There is no dispute that the brand name FIBA is owned by the appellant assessee. As regards HARDWYN brand, it was stated by Shri. S.S. Sayal and Shri R.S. Sayal in their statements that HARDWYN brand is owned by Shri S.S. Sayal and is assigned to appellant assessee vide assignment deed dt.17.02.2006. So long the assignment deed in favour of the appellant remains valid, the appellant is entitled to exemption under Notification No.8/2003 CE dt.01.03.2003 as amended, in respect of goods bearing HARDWYN brand, manufactured by them. It is also alleged that the department has not investigated use of the brand name by the owner Mrs. Santu Devi - HELD THAT - The description and nature of goods manufactured by the owner of the HARDWYN brand Mrs. Santu Devi is not on record. It is also not known whether the said owner is still using the said brand name on the products manufactured by her. In a catena of decisions, it has been held that bar of S.S.I. exemption in respect of branded goods is inapplicable if the brand name is used by the owner on different goods or the owner has abandoned use of the brand name - In the present case, since no attempt has been made by the department to find out the factual position as regards use or non-use of the HARDWYN brand by Mrs. Santu Devi, the denial of exemption merely on the basis of information regarding registration of HARDWYN brand in the name of Mrs. Santu Devi, without ascertaining the actual use of such brand name by the registered owner, is unsustainable. Alleged clearance of HARDWYN brand goods by the appellant assessee - HELD THAT - There is absolutely no evidence to even suggest that the entire clearance made by the appellant assessee was only of HARDWYN brand goods - It is admitted fact that the appellant is also manufacturing goods with FIBA‟ brand. This proves that the department has presumed the description and value of excisable goods cleared during the relevant period, for recovery of duty. It is settled law that duty cannot be demanded on assumptions and presumptions. In the present matters, since the description and value of the excisable goods has been presumed by the department, the demand of duty on basis of such presumed facts is unsustainable in law and hence has to be set aside - the demand of duty is set aside. Time Limitation - HELD THAT - Appellant were under bonafide belief that they were using their own brand names and hence eligible to S.S.I exemption - It is well settled law that extended period of limitation is not available to the department in cases where the assessee entertains a bonafide belief about non-levy of central excise duty - Under the circumstances, the extended period was not available to the department in the present matter and the demand of duty is, therefore, hit by bar of limitation also. The interest is not payable and penal provisions of law are not attracted in these matters. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Eligibility of SSI exemption. 2. Validity of the assignment deed for the brand name. 3. Limitation period for demanding duty. 4. Imposition of penalties. 5. Presumption of entire clearance under a single brand name. Issue-wise Detailed Analysis: 1. Eligibility of SSI Exemption: The core issue was whether the appellants were eligible for Small Scale Industry (SSI) exemption under Notification No. 8/2003-CE for goods bearing the brand names "HARDWYN" and "FIBA." The appellants argued that they were eligible for the exemption as both brand names were owned by them or assigned to them. The department contended that the brand name "HARDWYN" was owned by another person, thus disqualifying the appellants from the exemption. 2. Validity of the Assignment Deed: The assignment deed dated 17.02.2006, which transferred the right to use the brand name "HARDWYN" to the appellants, was a significant point of contention. The Commissioner (Appeals) had previously held that the assignment deed was valid even without registration with the Trade Mark authorities, thereby entitling the appellants to SSI exemption. This decision was not appealed by the department, making it final and binding. The Tribunal upheld this view, stating that the department could not re-agitate the issue of the assignment deed's validity in subsequent proceedings arising from the same cause of action. 3. Limitation Period for Demanding Duty: The appellants claimed they had a bona fide belief that they were eligible for SSI exemption, supported by a previous Order-in-Appeal that validated the assignment deed. The Tribunal agreed, noting that the extended period of limitation was not applicable in cases where the assessee entertained a bona fide belief about the non-levy of duty. Consequently, the demand for duty was barred by limitation. 4. Imposition of Penalties: Given the Tribunal's findings that the duty demand was unsustainable both on merits and on limitation, the imposition of penalties was also deemed inappropriate. The Tribunal set aside the penalties imposed on the appellants, citing the lack of mens rea and the bona fide belief held by the appellants regarding their eligibility for SSI exemption. 5. Presumption of Entire Clearance Under a Single Brand Name: The department presumed that the entire clearance of excisable goods during the relevant period was under the "HARDWYN" brand, taking the entire sale value in the profit and loss account as the assessable value of branded goods. The Tribunal found no evidence to support this presumption, noting that the appellants also manufactured goods under the "FIBA" brand. It was held that duty demands could not be based on assumptions and presumptions, and the demand of duty on this basis was unsustainable. Conclusion: The Tribunal allowed the appeals, setting aside the duty demands, interest, and penalties. The appellants were granted consequential relief as per law, affirming their eligibility for SSI exemption and the validity of the assignment deed for the "HARDWYN" brand. The Tribunal emphasized the importance of judicial discipline and the finality of unchallenged orders.
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