1995 (6) TMI 113 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty and penalty under impugned order. Interpretation of Notification 175/86 regarding brand name usage. Divergent views of different Tribunal Benches on brand name disentitlement. Granting stay of recovery pending appeal.

In this judgment by the Appellate Tribunal CEGAT, MADRAS, the petitioner sought a waiver of pre-deposit of duty amounting to Rs. 41,35,842/- and a penalty of Rs. 4,00,000/- imposed by the Collector of Central Excise, Madras, along with a duty demand of Rs. 23,817/-. The petitioner did not contest the duty amount but sought waiver for the other sums. The issue revolved around the petitioner's eligibility for the benefit of Notification 175/86, dated 1-3-1986, which was denied due to the use of a foreign manufacturer's brand name without any manufacturing activity or interest in India. The petitioner's counsel cited precedents like M/s. Fosroc Chemicals India Ltd. v. Collector of Central Excise and Ceramed Engineers (P) Ltd. v. Collector of Central Excise to support the plea for waiver, as stay had been granted earlier based on prima facie merits. The Department's representative argued against the waiver, citing a conflicting decision by the North Regional Bench in Festo Controls (P) Ltd. v. Collector of Central Excise, supporting the lower authority's order.

The Tribunal examined the precedents and found the ruling in Ceramend Engineers (P) Ltd. v. Collector of Central Excise, Bangalore, applicable to the present case. It noted that the disentitlement under Notification 175/86 due to brand name usage was intended for cases where the brand owner did not manufacture goods in India and thus, if another entity used the brand name, they would also be disentitled. Since the brand name in question was not used by anyone else in India, the petitioner's plea for waiver of pre-deposit was allowed based on prima facie grounds. Consequently, the Tribunal granted waiver of pre-deposit of duty and penalty, as well as a stay of recovery pending appeal, in line with the decision's ratio.

Acknowledging the conflicting views of different Benches, the Tribunal granted the waiver of pre-deposit of duty and penalty, along with a stay of recovery during the appeal process. The Revenue was given the option to request early hearing if the issue had recurring implications. Another Member of the Tribunal concurred with the decision for waiver of pre-deposit and stay, noting the divergent views within the Tribunal but refraining from expressing a final opinion on the case's merits. Ultimately, the Tribunal granted the waiver and stay, emphasizing the importance of the case's unique circumstances and the need for a fair and just resolution pending final adjudication.