1997 (11) TMI 170 - AT - Central Excise

Summary

Issues involved: Allegation of duty evasion due to use of logo of another company on product containers, applicability of Notification No. 175/86-C.E., invocation of Rule 9 and Section 11A for penalty imposition.

Summary:
The case involved M/s. Pelican Paints Pvt. Ltd. availing benefits under Notification No. 175/86-C.E. for manufacturing paints marketed by M/s. Killick Nixon Ltd. A show cause notice alleged duty evasion due to containers bearing Killick Nixon's logo, leading to penalty imposition on both companies. The Collector confirmed duty and imposed penalties, prompting appeals.

Argument by M/s. Pelican Paints:
M/s. Killick Nixon not being paint manufacturers, Pelican claimed entitlement to benefits. They cited trademark registrations and Tribunal judgments to support their position. Regarding limitation, they highlighted correspondence with the department showing awareness of the logo use, arguing against suppression allegations.

Argument by the Respondent:
The Respondent relied on a Tribunal judgment to assert ineligibility for benefits. They contested the correctness of declarations in the classification list concerning limitation issues.

Tribunal's Decision:
After reviewing submissions and relevant judgments, the Tribunal noted the show cause notice for an extended period alleging non-disclosure of logo use. However, correspondence revealed the department's knowledge of the logo, undermining suppression claims and establishing limitation defense. Consequently, the Tribunal did not delve into the case's merits.

Argument by M/s. Killick Nixon:
M/s. Killick Nixon's counsel emphasized their distinct corporate identity and transparent transactions, asserting the department's awareness of their relationship with Pelican. They challenged the burden of proof for penalty under Rule 209A.

Tribunal's Ruling:
The Tribunal found no evidence of deliberate wrongdoing by M/s. Killick Nixon in allowing their logo on Pelican's paint tins, leading to the penalty's dismissal. Both appeals were successful, with consequential relief granted within permissible limits.