1998 (7) TMI 239 - AT - Central Excise

Summary

Issues:
1. Duty confirmation on Absorbent Cotton Wool I.P. under Notification No. 185/87.
2. Allegation of selling goods under a brand name "BRISK."
3. Imposition of penalty for availing exemption under Notification No. 185/87.
4. Use of brand name on labels and documents.
5. Applicability of extended period of limitation.
6. Interpretation of Notification No. 185/87 regarding brand name exemption.

Analysis:
1. The case involves a dispute over the duty confirmation of Rs. 7,83,252.52 on Absorbent Cotton Wool I.P. manufactured and cleared by the appellants during 1987-88 to 1990-91 under Notification No. 185/87. The Collector of Central Excise alleged that the appellants wrongly availed total exemption from duty by selling the product under the brand name "BRISK," leading to the penalty imposition of Rs. 1,50,000.

2. Central Excise officers found that the appellants used the brand name "Brisk" on their products and documents during a visit to their factory premises. The investigation revealed the use of the brand name on packaging materials, order forms, and labels. The statement of the partner confirmed the historical use of the brand name "Brisk" on the product.

3. The show cause notice issued by the department proposed the classification of goods under CET sub-heading 30.04, denying the exemption under Notification No. 185/87. The adjudicating authority upheld the charges, leading to the duty demand confirmation and penalty imposition, resulting in the appeal.

4. The appellants argued that while the brand name appeared on documents like invoices and delivery challans, the goods themselves did not bear any brand name on their labels. The contention was supported by the Superintendent's confirmation that the labels only displayed the manufacturer's name, not a brand name. The Tribunal held that the use of a brand name on documents did not constitute selling goods under a brand name.

5. The extended period of limitation was invoked based on alleged suppression of the brand name usage to evade duty payment. However, the Tribunal noted that the classification list filed in 1987 included labels without any brand name, approved by authorities after verification, barring any suppression of facts by the appellants.

6. Analyzing Notification No. 185/87, the Tribunal emphasized that for the exemption to apply, the goods must not be sold under a brand name. The Tribunal cited precedents and circulars to support the appellants' claim that indicating the manufacturer's name on labels does not disqualify them from the exemption. Ultimately, the Tribunal ruled in favor of the appellants, granting them the benefit of the exemption and holding the demand as time-barred due to no suppression of facts.