2001 (3) TMI 169 - AT - Central Excise

Summary

Issues involved:
1. Affixing brand name of another person on excisable goods
2. Exemption from central excise duty under Notification No. 175/86
3. Related person status of M/s. LMS Marketing Pvt. Ltd.

Issue 1: Affixing brand name on excisable goods
The appeal questioned whether M/s. Nirlex Spares Pvt. Ltd. affixed another person's brand name on their manufactured goods and if they were eligible for central excise duty exemption under Notification No. 175/86. The Appellants argued that the Hexagonal Monogram printed on corrugated boxes by M/s. LMS Marketing Pvt. Ltd. was not a brand name. They cited previous cases where exemption was allowed despite external branding. However, the Tribunal ruled that the Hexagonal design on the boxes constituted a brand name, making the goods ineligible for exemption. The extended limitation period was invoked due to non-disclosure of the design's use.

Issue 2: Exemption from central excise duty
The Appellants contended that the Hexagonal design was not a brand name and thus Para 7 of Notification No. 175/86 did not apply. They referenced cases where exemption was granted despite external branding. However, the Tribunal determined that the design constituted a brand name, making the goods ineligible for exemption. The extended limitation period was invoked due to non-disclosure of the design's use.

Issue 3: Related person status of M/s. LMS Marketing Pvt. Ltd.
The Tribunal found that M/s. LMS Marketing Pvt. Ltd. was a related person of the Appellants based on shared directors, production supervision, financial transactions, and mutual interests. Citing previous rulings, the Tribunal upheld the related person status, leading to the demand for central excise duty from 1-4-1990. The duty amount was reduced, and penalties were adjusted based on the findings.

In conclusion, the Tribunal upheld the demand for central excise duty from 1-4-1990 due to affixing a brand name on goods, denied exemption under Notification No. 175/86, and established the related person status of M/s. LMS Marketing Pvt. Ltd. The duty amount was adjusted, and penalties were reduced based on the detailed analysis of the issues involved in the legal judgment.