2007 (7) TMI 328 - AT - Central Excise

Demand - Limitation - Suppression of fact - whether Rule 173B of the Central Excise Rules provided for mentioning of brand name in the classification list? - Held that - the omission to declare the use of brand name of another person in the classification list cannot lead to application of extended period of time.

Summary

Issues:
1. Whether the omission to declare the use of a brand name of another person in the classification list can lead to the application of an extended period of time.

Comprehensive Analysis:
The case involved a show cause notice dated 21-4-1995, where the assessee was alleged to have suppressed the fact that they were affixing sticker labels and ink stamps containing a registered brand name on their products. The Commissioner confirmed the demand raised and imposed a penalty, applying the extended period of limitation. The Tribunal allowed the assessee's appeals, leading to the matter being appealed to the Supreme Court and remanded back to the Tribunal on the issue of limitation. The Larger Bench was referred to decide whether the omission to declare the use of a brand name in the classification list could result in the application of an extended period of time.

The Tribunal considered various precedents to analyze the issue. In the case of Intercity Cable System (P) Ltd., it was held that the use of a brand name of another person, even for different products, could disentitle the assessee to the benefit of SSI exemption. However, it was also noted that if the assessee was under a bona fide belief of eligibility for exemption, the charge of suppression of facts may not be sustainable. The Tribunal also referred to other cases such as Pioneer Electronics and Festo Controls to establish the precedent regarding non-disclosure of brand names.

The Revenue's appeal against the finding on the time bar was upheld by the Apex Court, and various other cases were cited to determine the applicability of the extended period of limitation based on the disclosure of brand names. The Tribunal analyzed cases like Vora Products, Chemphar Drugs & Liniments, and Prolite Engineering Co. to understand the requirements for establishing liability beyond the standard limitation period.

The Tribunal examined multiple cases where deliberate concealment of brand names was noted, leading to the application of extended periods of limitation. Cases such as Taj Birdys Food Services Ltd., General Pharma Ltd., Vax Institute Laboratory Ltd., and others were referenced to illustrate instances where non-disclosure or misdeclaration of brand names led to duty demands based on extended periods of limitation.

Ultimately, the Tribunal relied on its previous decision in the case of Intercity Cable System (P) Ltd., which was upheld by the Apex Court, to answer the issue referred to the Larger Bench. It was concluded that the omission to declare the use of a brand name of another person in the classification list cannot lead to the application of an extended period of time. The papers were then returned to the Referral Bench for further orders on the appeals.