2006 (2) TMI 166 - SC - Central Excise

Why SSI exemption granted to assessee should not be disallowed and the duty which was not paid for the period December, 1993 and December, 1997 should not be recovered Held that - Before us, the parties have placed the entire facts. We may also place on record that it has been conceded before us by the learned counsel appearing on behalf of the Respondent that the earlier order dated 26-9-2001 shall not operate as a res-judicata but, as noticed hereinbefore, the only contention raised was that once the Revenue accepts a judgment, it cannot raise the said question once again. As we intend to remit the matter back to the Tribunal we should not make any observation at this juncture which would affect the merit of the matter one way or the other. We may also be misunderstood. Suffice it to say that having regard to the definition of the brand name as contained in Explanation IX to the notification dated 28-2-1993, the matter requires fresh consideration by the Tribunal upon taking into consideration the fact of the matter. If, however, the Tribunal comes to the conclusion or is of the opinion that further investigation in facts may be necessary, it may pass such order or orders as it may think fit and proper. Appeal allowed b way of remand.

Issues Involved:
1. Eligibility for SSI exemption under the Central Excise Act.
2. Use of brand name or trade name of another entity.
3. Relationship between the entities involved.
4. Maintainability of the appeal by the appellant.
5. Interpretation of relevant legal provisions and previous judgments.

Detailed Analysis:

1. Eligibility for SSI Exemption:
The respondent, a small-scale industry (SSI), claimed exemption from payment of excise duty under a notification dated 28-2-1993 issued under Section 5A of the Central Excise Act, 1944. The notification provided that the exemption would not apply if the manufacturer affixed the specified goods with a brand name or trade name of another person who is not eligible for the exemption. The definition of "brand name" or "trade name" was provided in Explanation IX of the notification.

2. Use of Brand Name or Trade Name:
The appellant contended that the respondent was not entitled to the SSI exemption because it used the brand name of Hira Industries Limited, which was not an SSI unit. The Tribunal, however, observed that the respondent used the brand name "BBC CEMENT," whereas Hira Industries Limited used "HIRA CEMENT." The Tribunal concluded that merely having a similar logo did not mean the respondent used the brand name of another person, thus not attracting the mischief of paragraph 4 of the notification.

3. Relationship Between the Entities Involved:
The appellant argued that the financial interrelationship between Hira Cement and Hira Industries Limited demonstrated that they belonged to a group of industries, known as Hira Group of Industries. The Commissioner, however, found that both entities were separate juristic persons and not related parties as per the relevant legal definitions. The Tribunal upheld this view, noting that the entities operated independently despite sharing premises and contact information.

4. Maintainability of the Appeal by the Appellant:
The respondent argued that the order dated 21-9-2001, which dropped the proceedings against them, had attained finality and could not be challenged again. The appellant countered that the decision of the Tribunal in Emkay Investments Pvt. Ltd. v. Commissioner, which was relied upon by the Commissioner, had been expressly reversed by the Supreme Court in Commissioner of Central Excise, Calcutta v. Emkay Investments (P) Ltd. and Another. The appellant maintained that the law declared by the Supreme Court should prevail over the Commissioner's decision.

5. Interpretation of Relevant Legal Provisions and Previous Judgments:
The Supreme Court noted that the criteria for determining eligibility for SSI exemption must be construed strictly. The Court referenced several judgments, including Tata Iron and Steel Co. Ltd. v. State of Jharkhand and Others and Commissioner of Central Excise, Calcutta v. Emkay Investments (P) Ltd. and Another, to emphasize that using the brand name or trade name of another ineligible person would disqualify an entity from claiming the exemption. The Court found that the Tribunal and the Commissioner had not considered the matter in light of these decisions.

Conclusion:
The Supreme Court allowed the appeal, set aside the impugned judgment, and remitted the matter back to the Tribunal for fresh consideration. The Tribunal was directed to re-evaluate the case, taking into account the definition of "brand name" in the notification and the relevant legal precedents. The Court refrained from making any observations that might affect the merits of the case, allowing the Tribunal to conduct further investigations if necessary. No costs were awarded.

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