1998 (5) TMI 61 - AT - Central Excise

Summary

Issues:
1. Demand of differential duty and penalty imposed against the applicants for not availing the benefit of Notification No. 175/86 for lamps and light fittings manufactured and cleared with a brand name of another person.
2. Whether the demand is barred by limitation.
3. Ownership of the brand name "Love Lites" and entitlement to the benefit under Notification No. 175/86.
4. Allegations of suppression and intentional evasion of duty by the applicants.

Analysis:

Issue 1:
The Appellate Tribunal confirmed a demand of differential duty and imposed a penalty against the applicants for not availing the benefit of Notification No. 175/86 due to manufacturing and clearing goods with a brand name belonging to another ineligible entity. The period in question was from May 1989 to November 1989.

Issue 2:
The applicants argued that the demand was time-barred as the department was aware of the brand name usage, and a show cause notice was issued in 1991, which was adjudicated in 1992 dropping the duty demand on seized goods. They contended there was no intention to evade duty, as they believed they were joint owners of the brand name "Love Lites." The Tribunal found a strong prima facie case for waiver on the limitation point, as the applicants' belief was supported by previous orders.

Issue 3:
The ownership of the brand name "Love Lites" was disputed, with the department claiming it belonged exclusively to another entity not eligible for the exemption. The Tribunal noted this as a contentious issue requiring detailed examination during the final hearing, but found a strong prima facie case for waiver on the limitation point based on the applicants' bona fide belief and lack of evidence of intentional suppression.

Issue 4:
The department alleged intentional suppression and evasion of duty by the applicants, pointing out previous proceedings. However, the Tribunal found no evidence to support deliberate suppression, as the applicants' belief in their entitlement to the brand name was not contradicted. Consequently, the demand for the disputed period was considered prima facie barred by limitation, leading to the waiver of pre-deposit of duty and penalty during the appeal's pendency.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Tribunal's findings regarding the demand, limitation, ownership of the brand name, and allegations of suppression and evasion of duty.