2000 (4) TMI 82 - AT - Central Excise

Summary

Issues involved:
- Whether the goods cleared in the name of one entity were actually manufactured by another entity
- Whether the brand name 'UDP' belonging to a third party was affixed on the goods
- Imposition of penalty under section 11AC of the Central Excise Act
- Imposition of penalty separately on the partners of the entities involved

Analysis:

1. Goods Clearance and Brand Name Affixation:
The case involved a dispute regarding the clearance of goods in the name of one entity, M/s. Kunal Engineering, which were alleged to be manufactured by another entity, M/s. Devendra Industries. Additionally, the issue of affixing the brand name 'UDP' belonging to a third party on the goods was raised. The Commissioner confirmed the demand of Central Excise duty and penalties based on these allegations. The defense argued that the brand name 'UDP' belonged to them, representing family members' initials, and that they were eligible for small-scale exemption as they were not using another person's brand name. However, statements and evidence indicated that the goods were indeed cleared in the name of M/s. Kunal Engineering but manufactured by M/s. Devendra Industries. The tribunal found that the brand name 'UDP' was affixed on some machines, impacting the eligibility for exemption.

2. Existence of M/s. Kunal Engineering:
The defense presented evidence of M/s. Kunal Engineering's registration and operations to counter the claim that the entity did not exist. However, statements and records suggested otherwise, indicating that M/s. Kunal Engineering did not have the facilities to manufacture the goods in question and that the goods were actually manufactured by M/s. Devendra Industries. The tribunal found in favor of the Commissioner's assessment regarding the non-existence of M/s. Kunal Engineering.

3. Penalty Imposition:
Regarding the imposition of penalties under section 11AC of the Central Excise Act and separately on the partners, the defense argued against the penalties, citing legal precedents and lack of evidence. The tribunal held that penalties could not be imposed under section 11AC for clearances made before the provision came into force. However, penalties were deemed applicable under Rule 209A of the Central Excise Rules on the partners who were involved in the production and sale of the goods.

4. Remand and Disposition:
Based on the findings, the tribunal remanded the matter to the Adjudicating Authority for re-quantifying the duty amount and imposing penalties on all three appellants involved. The appeals were disposed of with directions for further proceedings in line with the tribunal's decisions and assessments.

This detailed analysis of the judgment highlights the key issues, arguments presented, evidentiary considerations, and the tribunal's findings and directions for further action.