2004 (9) TMI 272 - AT - Central Excise

Demand and penalty - maintainability of appeal - Limitation - denial of SSI Exemption Notification for shaving cream, conflicting decisions on small scale exemption benefit - Denial exemption benefit to a manufacturer using the brand name/trade name of another person - HELD THAT - The show cause notice has been issued on 6-1-2003 for demanding the duty for the period from December, 1997 to 1999-2000 by invoking the extended period of limitation. We agree with the learned Advocate for the respondents that during the relevant period, there were conflicting decisions of the Appellate Tribunal itself, as to whether the benefit of small scale exemption is deniable to a manufacturer using the brand name/trade name of another person only when the excisable goods manufactured by him are the same goods. In view of the conflicting decisions the matter was referred to the Larger Bench of the Tribunal in the case of Fine Industries 2002 (10) TMI 114 - CEGAT, COURT NO. II, NEW DELHI . Accordingly, the respondents have reasons to hold the bona fide belief that they are eligible for the benefit of small scale exemption in respect of shaving cream bearing the brand name of another person as the brand name owner was not manufacturing the shaving cream. No material has also been brought on record by the Revenue to show that the brand name owner was manufacturing shaving cream. Accordingly, we hold that the entire demand is hit by time limit stipulated in Section 11A(1) of the Central Excise Act. We, therefore, dismiss both the appeals, filed by the Revenue.

Summary

Issues involved: Appeals filed by Revenue against Order-in-Appeal allowing appeals by certain companies, confirmation of duty demand, reduction of penalty, maintainability of appeal, denial of SSI Exemption Notification for shaving cream, conflicting decisions on small scale exemption benefit, time limit for demanding duty.

Appeal against Order-in-Appeal: Revenue filed appeals against Order-in-Appeal allowing appeals by M/s. Wonderax Laboratories (India) Pvt. Ltd. and Shri U.S. Kapoor, confirming duty demand against M/s. Paragon Fragrances, and reducing penalty to Rs. 2,000.

Maintainability of Appeal: Appeal against M/s. Paragon Fragrances dismissed as no prayer made for penalty enhancement, making it not maintainable due to absence of averment and prayer.

Denial of SSI Exemption for Shaving Cream: Dispute arose regarding denial of SSI Exemption Notification for shaving cream bearing brand name 'WONDERAX' manufactured by M/s. Wonderax Laboratories (India) Pvt. Ltd. Commissioner (Appeals) allowed appeals based on assignment of brand name and reliance on precedent regarding identical goods requirement.

Conflicting Decisions on Small Scale Exemption: Conflicting decisions on whether small scale exemption applies when manufacturer uses another's brand name for different goods. Matter referred to Larger Bench of Tribunal. Respondents believed in good faith they were eligible for exemption due to conflicting decisions and lack of evidence of brand name owner manufacturing shaving cream.

Time Limit for Demanding Duty: Show cause notice issued beyond time limit specified in Section 11A(1) of Central Excise Act for demanding duty from December 1997 to 1999-2000. Tribunal dismissed appeals by Revenue, holding demand hit by time limit and respondents eligible for small scale exemption.

This judgment highlights the issues of appeal against Order-in-Appeal, maintainability of appeal, denial of SSI Exemption for shaving cream, conflicting decisions on small scale exemption benefit, and time limit for demanding duty. The Tribunal dismissed the appeal against M/s. Paragon Fragrances due to lack of prayer for penalty enhancement. The dispute over SSI Exemption for shaving cream centered on brand name assignment and precedent on identical goods requirement. Conflicting decisions on small scale exemption led to a good faith belief by respondents in their eligibility, supported by lack of evidence of brand name owner manufacturing the goods. The demand for duty was deemed time-barred under Section 11A(1) of the Central Excise Act, resulting in the dismissal of Revenue's appeals.