2003 (9) TMI 157 - AT - Central Excise

Summary

Issues:
- Whether the benefit of exemption under Notification Nos. 9/99-C.E., dated 28-2-1999 and 9/2000-C.E., dated 1-2-2000 is available to excisable goods manufactured by the appellant.

Analysis:
1. The appellant, a manufacturer of Receiver Driers, sought small scale exemption for their goods bearing the brand name "KMP" under a Joint Venture Agreement. They argued that as per Circular No. 71/71/94-CX., the small scale exemption should apply when goods are used for further manufacture with a foreign brand name. They relied on a previous Tribunal decision and claimed ownership of the brand name through continuous use.

2. The appellant cited a Tribunal decision stating that for the exemption to be denied, identical goods under the same brand name must be available in the market, which the Revenue failed to prove. They also contested the calculation of demand, citing a case on classification and cum-duty pricing.

3. The appellant argued against the invocation of an extended period of limitation, claiming no intent to evade duty due to Tribunal decisions supporting their eligibility for exemption. They emphasized that their goods were used for further manufacture, ensuring no revenue implications.

4. The Revenue contended that the goods bore a foreign brand name, making them ineligible for exemption under Para 4 of the notification. They argued that the appellant's use of the brand name for trading purposes negated their eligibility for the exemption.

5. The Tribunal found that the appellant's goods indeed bore a foreign brand name, as per the Trade Mark Royalty Agreement, and therefore, they were not entitled to the small-scale exemption. They disagreed with the appellant's interpretation of the Circular and previous Tribunal decisions, concluding that the benefit of exemption did not apply.

6. The Tribunal rejected the appellant's claim that the goods were not traded, emphasizing that they were sold to customers under the foreign brand name for use in car air conditioners. They upheld the Revenue's argument regarding the extended period of limitation due to the suppression of facts.

7. The Tribunal remanded the matter to recalculate the duty amount, considering cum-duty pricing and abatement. They directed the Commissioner to reassess the duty calculation and imposed a penalty of Rs. 1 lakh, finding the initial penalty excessive. The appeal was disposed of accordingly.