2000 (9) TMI 151 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 175/86-CE dated 1-3-1986.
2. Classification and branding of Brass Sanitary Bathroom fittings.
3. Eligibility of M/s. Arkson Pvt. Ltd. for exemption under Notification No. 175/86.
4. Application of extended period of limitation.
5. Compliance with Rule 174 of the Central Excise Rules.

Detailed Analysis:

1. Eligibility for exemption under Notification No. 175/86-CE dated 1-3-1986:
The primary issue was whether the respondents, who manufacture Brass Sanitary Bathroom fittings and affix them with the brand name "ARK" of another entity, are eligible for exemption under Notification No. 175/86-CE. The Tribunal had previously remanded the matter to determine the eligibility of M/s. Arkson Pvt. Ltd. under the said notification. The Additional Commissioner, upon remand, confirmed the demand of duty and imposed penalties, holding that M/s. Arkson Pvt. Ltd. were not eligible for the exemption as they were not holding an L-4 license and their aggregate sale exceeded the specified limit.

2. Classification and branding of Brass Sanitary Bathroom fittings:
The goods in question were classified under Sub-heading 8481.80 and 8481.99 of the Central Excise Tariff Act. The branding issue arose because the respondents were using the stylized brand name "ARK," which was associated with M/s. Arkson Pvt. Ltd. The Tribunal had earlier found that the stylized "ARK" is a trade name of M/s. Arkson within the meaning of the relevant paragraph of Notification No. 175/86.

3. Eligibility of M/s. Arkson Pvt. Ltd. for exemption under Notification No. 175/86:
The Commissioner (Appeals) set aside the adjudication order, holding that M/s. Arkson Pvt. Ltd. met the conditions laid down in Notification No. 175/86, including being registered as an SSI unit and the classification of goods under specified sub-headings. The Tribunal agreed, stating that M/s. Arkson Pvt. Ltd. were manufacturing C.I. castings exempted from duty and held an SSI registration certificate. Thus, they were eligible for the exemption despite not manufacturing specified goods listed in the Annexure to the Notification.

4. Application of extended period of limitation:
The Additional Commissioner invoked the extended period of limitation, citing that the fact regarding the manufacture of goods affixed with another person's brand name was not disclosed to the Department. However, the Commissioner (Appeals) and the Tribunal found that the respondents acted under a reasonable belief that the brand name "ARK" belonged to M/s. Khanna Industries, who were compliant with Rule 174. Hence, the extended period of limitation was not applicable.

5. Compliance with Rule 174 of the Central Excise Rules:
The Additional Commissioner held that M/s. Arkson Pvt. Ltd. did not file the required declaration under Rule 174, affecting their eligibility for exemption. However, the Tribunal noted that the non-filing of a declaration does not impact eligibility if the conditions of the notification are met. The Tribunal cited precedents where non-compliance with procedural requirements did not negate the substantive eligibility for exemptions.

Conclusion:
The Tribunal concluded that all respondents were eligible for the exemption under Notification No. 175/86, as M/s. Arkson Pvt. Ltd. were eligible for the grant of exemption under the notification. The appeals filed by the Revenue were rejected on merits, and the Tribunal did not address the extended period of limitation or the date from which the respondents started affixing the brand name "ARK."