2000 (8) TMI 697 - AT - Central Excise

Summary

Issues:
- Duty demand confirmation under Rule 9(2) of Central Excise Rules
- Imposition of penalty
- Interpretation of Notification No. 1/93 dated 28-2-1993
- Use of brand name in manufacturing goods
- Validity of impugned order

The appeal was filed against the order-in-original confirming duty demand and imposing a penalty on the appellants. The appellants were engaged in manufacturing automobile components and were found manufacturing rear axles under a specific brand in addition to their own. The issue arose as to whether they were entitled to the benefit of Notification No. 1/93 for these branded goods. The Collector confirmed the duty demand and penalty, which was challenged in the appeal. The appellants claimed they started manufacturing under their own brand after amending the agreement. The JDR argued that they continued using the brand name even after the amendment.

The Tribunal analyzed the facts and agreements between the parties. It was established that the appellants had been manufacturing rear axles under the brand name of another company, not eligible for the exemption under Notification No. 1/93. The Collector's decision was based on the continuous use of the brand name even after the alleged amendment in the agreement. The Tribunal found no evidence to support the appellants' claim that they stopped using the brand name after the agreement amendment. The Commissioner (Appeals) dropping the duty demand for a previous period did not affect the current dispute regarding the use of the brand name.

The Tribunal upheld the Collector's decision, stating that the denial of benefit under Notification 1/93 for using an ineligible person's brand name was valid. Referring to a previous case, the Tribunal emphasized that using an ineligible person's brand name disqualifies a manufacturer from availing certain benefits. The duty demand confirmation was upheld, but the penalty imposed was reduced considering the circumstances. The appeal was dismissed due to lack of merit, with the penalty amount modified to Rs. 25,000 from Rs. 50,000.

In conclusion, the Tribunal affirmed the duty demand confirmation and reduced the penalty amount in a case where the appellants were found manufacturing goods under a brand name not eligible for certain exemptions, despite their claims of amending the agreement and using their own brand. The decision highlighted the importance of complying with regulations regarding the use of brand names in manufacturing processes.