1998 (9) TMI 325 - AT - Central Excise

Summary

Issues involved:
Eligibility of goods cleared with another person's brand name for small-scale exemption, time-barring of demands, interpretation of Notification No. 175/86, suppression of facts, imposition of penalties.

Eligibility of goods for small-scale exemption:
The issue in the appeals was whether goods cleared with the brand name of another person were eligible for small-scale exemption. The appellants argued that goods without affixing any brand name should be allowed the exemption. They contended that the exclusion in the notification applied only to goods affixed with the brand name of another manufacturer, not a trader. The Tribunal found that the exemption was limited to branded goods cleared after affixing the brand name of another person, rejecting the appellants' plea. However, it acknowledged that duty demand should have been limited to goods cleared after affixing the brand name by the manufacturer, not unjustifiably on goods without the brand name.

Time-barring of demands and suppression of facts:
The appellants argued that the demands were time-barred as they were unaware of the amendment disentitling branded goods from the exemption. They claimed that the extended period under Section 11A of the Central Excise Act did not apply due to lack of wilful misstatement or suppression of facts. The Tribunal disagreed, stating that the appellants did not disclose the affixing of another person's brand name to the authorities, rendering the fact unknown to the Central Excise authorities. It held that the demands were not time-barred and the cases were not covered by previous court decisions on suppression of facts.

Interpretation of Notification No. 175/86:
The Tribunal analyzed the interpretation of Notification No. 175/86, emphasizing that the exclusion applied to goods affixed with the brand name of another person. It noted that the appellants' argument about a different interpretation of the notification was invalid since the non-payment resulted from their lack of awareness of the notification amendment, not a distinct interpretation. The Tribunal remanded the cases for fresh computation of duty demand, limiting it to goods cleared after affixing the brand name by the manufacturer.

Imposition of penalties:
Regarding the imposition of penalties, the Tribunal ruled that penalties were not justified in these cases. It noted that the appellants were unaware of the notification amendment and were not informed by the departmental authorities about the changes. Therefore, the penalties were set aside, and the cases were remanded for the reassessment of duty demand as per the Tribunal's directions.