1999 (12) TMI 484 - AT - Central Excise

Summary

Issues:
1. Seizure of goods for confiscation.
2. Entitlement to the benefit of small scale exemption notification.

Seizure of Goods for Confiscation:
The appeal was filed against the order-in-original passed by the Commissioner of Central Excise, Chandigarh. The appellants were engaged in manufacturing LPG pressure regulators and cylinder valves, availing small scale exemption notification. During a visit by revenue officers, excess regulators and valves were found, leading to confiscation and a redemption fine. The appellants argued that the goods were not fully finished as per ISI specifications and were packed for protection. However, the goods were found fully packed in wooden boxes, indicating completion. As they were not entered in the RG 1 register, confiscation was upheld.

Entitlement to Small Scale Exemption Notification:
The appellants contended that they supplied regulators and valves to gas companies with the companies' logos, not trading in these goods. The Revenue did not dispute this fact. Referring to relevant case laws and circulars, the Tribunal held that if goods were manufactured with the customer's logo and not sold but used by the customers, the small scale exemption applied. The appellants affixed plates with gas companies' names on the goods supplied, indicating ownership, not branding. Relying on precedents, the Tribunal allowed the appeal, granting the benefit of the small scale exemption notification. The imposed penalty was reduced from Rs. 10 lakh to Rs. 50,000 due to the partial allowance of the appeal.

This judgment clarifies the criteria for confiscation of goods and the eligibility for small scale exemption notification, emphasizing the importance of ownership indication over branding in determining entitlement to exemptions.