2007 (10) TMI 388 - HC - Central Excise

Demand - Limitation - The only issue in this case is whether the appellant could have invoked the extended period of limitation as mentioned in the proviso to Section 11A(1) of the Central Excise Act, 1944?. Held that - assessee acted bonafide in making its clearance and claiming exemption even using other s brand name. extended period of limitation not invocable. Impugned Tribunal s order well reasoned. No substantial question of law arise, appeal dismissed.

Summary

Issues:
- Interpretation of proviso to Section 11A(1) of the Central Excise Act, 1944 regarding the extended period of limitation for invoking exemption from excise duty.

Detailed Analysis:

1. Issue: Interpretation of Proviso to Section 11A(1)
The case revolved around the question of whether the appellant could invoke the extended period of limitation as provided in the proviso to Section 11A(1) of the Central Excise Act, 1944. The dispute arose from the use of the brand name "WONDERAX" by the Assessee, a small scale industry, for goods other than shaving cream, which was the intended product of the brand name owner. The Tribunal referred to a previous conflict among different Benches regarding the interpretation of exemption Notification No. 1/93 dated 28th February, 1993, which was resolved in C.C.E. v. Fine Industries, 2002. The Full Bench held that for denial of exemption, both the Assessee and the brand name owner must manufacture identical goods. Since the Assessee used the brand name for a different product, the Tribunal concluded that the Assessee acted bona fide and was justified in claiming exemption from excise duty.

2. Analysis of Tribunal's Decision
The Tribunal's decision was based on the fact that there was a conflict of views on the issue, which was only resolved in 2002, whereas the relevant period of controversy was 1998-1999 and 1999-2000. The Tribunal found that the Assessee had a legitimate belief that it was exempt from excise duty, especially during the period when the dispute was unresolved. Therefore, the Tribunal concluded that there was no justification for extending the time limitation beyond one year under the proviso to Section 11A(1) of the Act.

3. Conclusion
The High Court upheld the Tribunal's decision, stating that the Tribunal's opinion was well-reasoned. It was noted that the Assessee's actions were justifiable given the circumstances and the unresolved controversy during the relevant period. The High Court found no substantial question of law for consideration and dismissed the appeal.

In summary, the judgment focused on the interpretation of the proviso to Section 11A(1) of the Central Excise Act, 1944 in the context of an Assessee using a brand name for goods other than those intended by the brand name owner. The Tribunal's decision, upheld by the High Court, emphasized the bona fide belief of the Assessee and the lack of justification for extending the time limitation for invoking exemption from excise duty.