2000 (5) TMI 318 - AT - Central Excise

Summary

Issues:
1. Denial of exemption under Notification No. 73/87 due to the use of a foreign brand name.
2. Benefit of time bar for demands related to the period between 1989-1992.
3. Discrepancy in the demand for air-conditioner kits and Ice Cubic machine.
4. Penalty imposition and reduction for a small-scale unit.

Issue 1: Denial of Exemption under Notification No. 73/87
The appellant, a manufacturer of Air Conditioners and Ice Cubic machines, was denied exemption under Notification No. 73/87 due to using the brand name "WESSAMAT" of a German manufacturer. The Tribunal referred to a previous decision indicating that an Indian manufacturer using a foreign brand name would be ineligible for exemption. The demand on the appellant for using the foreign brand name was confirmed, amounting to Rs. 8,58,900.

Issue 2: Benefit of Time Bar
The appellant claimed the benefit of time bar for demands between 1989-1992, arguing that the notice was issued beyond the normal six-month period under Section 11A of the Central Excise Act. The appellant contended that the issue of brand name use affecting exemption eligibility was disputed until a Larger Bench decision clarified it. However, the Tribunal found discrepancies in the appellant's conduct across different units, leading to the rejection of the time bar benefit claim and upholding the demand of Rs. 8,58,900.

Issue 3: Discrepancy in Demand for Air-conditioner Kits
A demand was made for 29 air-conditioner kits and an Ice Cubic machine, totaling Rs. 2,18,900. The appellant disputed this demand, highlighting inconsistencies in the pricing mentioned in the show cause notice and the unavailability of the relevant file during adjudication. The Tribunal acknowledged the merit in the appellant's submission and ordered the Commissioner to provide the necessary documents for reconsideration of this demand.

Issue 4: Penalty Imposition and Reduction
The appellant raised concerns about the harshness of the Rs. 11 lakhs penalty, considering the small-scale nature of the unit, which was no longer operational. Taking these factors into account, the Tribunal reduced the penalty to Rs. 6 lakhs. With adjustments in penalty and remand of the demand over Rs. 2 lakhs, the impugned order was confirmed, and the appeal was disposed of accordingly.