1994 (11) TMI 263 - AT - Central Excise

Summary

Issues Involved:
1. Suppression of facts and wrongful claim of SSI exemption.
2. Use of foreign brand name and eligibility for exemption.
3. Time bar and suppression of facts.
4. Imposition of penalty.

Summary:

1. Suppression of Facts and Wrongful Claim of SSI Exemption:
The appellants were accused of suppressing the fact of affixing the brand name of another manufacturer, who was not eligible for the SSI exemption u/r 9(2) of Central Excise Rules, 1944 read with Section 11A of Central Excises and Salt Act, 1944. The Collector confirmed the differential duty of Rs. 7,82,516.74 and imposed a penalty of Rs. 80,000/- u/r 173Q(1) of Central Excise Rules, 1944. The appellants contended that the brand name H & R was their own and prominently affixed on their products, which was known to the departmental officers during their visits.

2. Use of Foreign Brand Name and Eligibility for Exemption:
The Collector found that the brand name H & R, with a logo of a hummingbird, was used by the German company Hermann & Reimer, and the appellants were using the same brand name and logo. The Collector concluded that using the same brand name and logo of a foreign manufacturer amounted to using the brand name of another person to capture the market. The Tribunal upheld this view, noting that the brand name, logo, and color scheme were identical to that of the foreign company, and there was mutuality of interest in each other's production line of goods.

3. Time Bar and Suppression of Facts:
The Collector rejected the appellants' plea of time bar, stating that they had not disclosed their use of the foreign company's brand name and their agreement with that company. The Tribunal agreed, noting that the true facts were revealed only after a raid and investigation, and the appellants had clearly suppressed the facts.

4. Imposition of Penalty:
The Tribunal found the penalty of Rs. 80,000/- excessive and reduced it to Rs. 20,000/-. However, the appeal was dismissed on all other grounds, upholding the Collector's order.