2000 (5) TMI 412 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmation on goods affixed with a specific brand name.
2. Denial of Small Scale Industry (SSI) benefit to the appellants.
3. Imposition of penalty under Rule 173-Q of the Central Excise Rules.
4. Inclusion of Installation and After Sales Service charges in the assessable value of final products.
5. Barred limitation for duty demand calculation post a specific date.

Analysis:

1. The appeal before the Appellate Tribunal CEGAT, New Delhi stemmed from the duty demand confirmation of Rs. 17,26,866 on various goods manufactured by the appellants, including Cooking Gas Stoves and Chapati Plates, affixed with the brand name 'Handi Gas' belonging to M/s. Associated Cylinders Industries Pvt. Ltd. The Commissioner of Central Excise, Chandigarh upheld the duty demand and imposed a penalty of Rs. 5 lakhs under Rule 173-Q of the Central Excise Rules.

2. The Tribunal noted that M/s. ACI had been using the brand name 'Handi Gas' since September 1985, even though the registration application was filed later in November 1990. It was established that 'Handi Gas' was indeed the brand name of M/s. ACI, which led to the denial of SSI exemption to the appellants. The Tribunal referenced the case law of Bell Products Company v. Union of India [1995 (78) E.L.T. 404 (Madras)] to support the disentitlement of SSI exemption due to the use of another person's brand name not eligible for the benefit.

3. The Tribunal concluded that the appellants were not entitled to the benefit of exemption under Notification No. 175/86 due to the use of the brand name 'Handi Gas' associated with M/s. ACI. However, the demand post 27-6-1991 was deemed barred by limitation as the Department had knowledge of the brand association and approved classification lists filed by the appellants claiming the SSI benefit. The Tribunal set aside the demand for the period after 27-6-1991 but upheld it for the prior period.

4. Regarding the inclusion of Installation and After Sales Service charges in the assessable value of final products, the Tribunal ruled that installation charges were not includible as per Apex Court decisions. However, after-sales service charges were considered a part of the assessable value, leading to the confirmation of the duty demand related to such charges.

5. The case was remanded to the jurisdictional Commissioner for re-calculation of the duty demand for the period preceding 27-6-1991, excluding the installation charges. The penalty imposed was set aside, allowing the Commissioner to impose an appropriate penalty based on the recalculated duty demand. Ultimately, the appeal was partly allowed by the Tribunal.