2001 (7) TMI 636 - AT - Central Excise

Summary

Issues:
1. Validity of small scale exemption denial to M/s. C.H. Herbs.
2. Legality of penalties imposed on M/s. Anzalp Pharmaceuticals (P) Ltd. and its Managing Director.
3. Financial hardship plea for total waiver of duty and penalties.
4. Imposition of penalty on M/s. Anzalp Pharmaceuticals (P) Ltd. and its Managing Director.

Issue 1 - Small Scale Exemption Denial:
The judgment addressed the contention that the Commissioner's order denying small scale exemption to M/s. C.H. Herbs was invalid due to the use of the brand name of M/s. Anzalp Pharmaceuticals (P) Ltd. The Tribunal refrained from definitive findings at that stage to avoid prejudging the issue. It highlighted the need for a thorough examination of the facts to determine the validity of the denial of the exemption. The judgment referred to the Tribunal's precedent regarding the effective date of brand name assignment and emphasized the complexity of the matter.

Issue 2 - Legality of Penalties:
Regarding the penalties imposed on M/s. Anzalp Pharmaceuticals (P) Ltd. and its Managing Director, the Tribunal found the impugned order invalid on the face of it. It stated that no penalties could be legally imposed on them as they had assigned their trade name to M/s. C.H. Herbs. The Tribunal concluded that these appellants had a strong prima facie case, and their request for total waiver of pre-deposit of penalty amounts was justified.

Issue 3 - Financial Hardship Plea:
The judgment acknowledged the financial hardship plea presented by the appellants, supported by the submission of balance sheets for the last three years. However, the Tribunal noted that financial difficulties alone were insufficient grounds for a total waiver of duty and penalty pre-deposits. It emphasized the need for a more comprehensive assessment beyond financial challenges to warrant such a waiver.

Issue 4 - Imposition of Penalty on M/s. Anzalp Pharmaceuticals (P) Ltd. and its Managing Director:
The Tribunal granted an unconditional waiver of the pre-deposit of penalty amounts for M/s. Anzalp Pharmaceuticals (P) Ltd. and its Managing Director until the disposal of the appeals. It deemed the imposition of penalties on these appellants as legally unsound, as they had transferred their trade name to another party. The judgment highlighted the lack of violation of Excise Law/rules by these appellants, supporting the decision for a waiver of pre-deposit.

In conclusion, the judgment directed the manufacturer, Shri Chhagan Lal Sharma, to make a specific pre-deposit towards the duty amount within a specified period. It granted conditional waivers and stays on recovery for different appellants based on the assessment of each issue discussed in the judgment. The compliance reporting date was set for a future hearing.