2000 (12) TMI 413 - AT - Central Excise

Summary

Issues:
- Whether the appellants were marketing Wollastonite Powder under the brand name 'Kemolit S-3' or not.
- Whether the appellants were entitled to the benefit of exemption as an SSI unit.
- Imposition of penalties on the manufacturer company and a partner.

Analysis:

1. Marketing under Brand Name 'Kemolit S-3':
The central issue in this case was whether the appellants were marketing Wollastonite Powder under the brand name 'Kemolit S-3'. The Collector of Central Excise concluded that the goods were branded, leading to the denial of the SSI unit exemption. The appellant's argument, supported by an affidavit from bag manufacturers, was that the brand name was not affixed on the bags. However, the Tribunal dismissed this argument, stating that the brand name could have been affixed post-receipt by the manufacturer, irrespective of the bag manufacturer's actions.

2. Entitlement to SSI Unit Exemption:
The appellants had availed the benefit of exemption as an SSI unit for the goods cleared between February 1990 and June 1991. The duty evaded was found to be Rs. 9,39,953 due to the branding of goods. The adjudicating authority confirmed that the brand name 'Kemolit S-3' was affixed on the products during this period, as evidenced by the statement of Shri Shailendra Baxi and direction slips from the Head Office. The Tribunal upheld the authority's decision, emphasizing that the direction to discontinue the brand name post-June 1991 indicated its prior existence, justifying the denial of exemption.

3. Imposition of Penalties:
In addition to the duty evasion, penalties of Rs. 10,000 on the manufacturer company and Rs. 5,000 on a partner were imposed under Rule 209A of the Central Excise Rules, 1944. The penalties were justified based on the branding of goods and the failure to comply with the SSI unit criteria. The Tribunal upheld the penalties, affirming the Collector's order and dismissing the appeals. The presence of clear instructions to discontinue the brand name post-June 1991 further supported the imposition of penalties for the period in question.

In conclusion, the Tribunal affirmed the Collector's decision, emphasizing the existence of the brand name 'Kemolit S-3' on the products during the relevant period, leading to the denial of SSI unit exemption and imposition of penalties. The direction slips from the Head Office provided crucial evidence supporting the branding of goods and subsequent discontinuation, justifying the penalties imposed.