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2012 (12) TMI 739 - AT - Central ExciseSSI exemption under Notification No.1/93-CE - denial of exemption as goods selling under brand name belonging to another person - whether just by adding the word Dugar before the word Tetenal and using the brand name Dugar Tetenal on the goods would disentitle the respondent company for the benefit of SSI exemption - Held that - As decided in CCE, Trichy Vs. Rukmani Pakkwell Traders 2004 (2) TMI 69 - SUPREME COURT OF INDIA that use of part of brand name or trade name of another person, so long as it indicates a connection in the course of trade, would be sufficient to disentitle the person for the SSI exemption. As it is not disputed that the word Tetenal used along with the Dugar on the goods manufactured by the respondent company is the brand name of M/s. Tetenal Vertribs GmBH, Germany, with whom the respondent had technical collaboration and as such, the word Tetenal indicates a connection in the course of trade with M/s.Tetenal Vertribs GmBH, Germany. We, therefore, hold that the impugned order extending the benefit of SSI exemption under Notification No.1/93-CE to the respondent company in respect of the goods cleared with the brand name Dugar Tetenal is not sustainable and is liable to be set aside - in favour of Revenue.
Issues:
1. Eligibility for SSI exemption under Notification No.1/93-CE based on the use of brand name "Dugar Tetenal" by the respondent company. 2. Shortage of cenvat credit availed inputs and finished products leading to duty demand. 3. Imposition of penalties on the respondent company and individuals. Issue 1: Eligibility for SSI exemption under Notification No.1/93-CE: The respondent company was availing SSI exemption under Notification No.1/93-CE for goods chargeable to central excise duty. The dispute arose as the company was selling goods under the brand name "Dugar Tetenal," which was associated with M/s. Tetenal Vertribs GmBH, Germany. The central excise department alleged that using a brand name belonging to another person disqualified the company from SSI exemption, leading to a duty shortfall of Rs. 17,92,095. The Addl. Commissioner confirmed the duty demand, but the Commissioner (Appeals) set aside the demand, stating that "Dugar Tetenal" was distinct from "Tetenal," allowing SSI exemption. The Revenue appealed this decision. Issue 2: Shortage of cenvat credit availed inputs and finished products: During a visit to the respondent company's factory, central excise officers found discrepancies in cenvat credit availed inputs and finished products. A show cause notice was issued for recovery of central excise duty on the alleged clandestine removal of inputs and finished goods. The Addl. Commissioner confirmed a total duty demand of Rs. 18,10,628 and imposed penalties. The Commissioner (Appeals) upheld duty demands for shortages but set aside the demand related to SSI exemption. The Revenue appealed against this decision. Issue 3: Imposition of penalties: The show cause notice included the recovery of duty, interest, and penalties on the respondent company and individuals for alleged duty evasion and clandestine removal of goods. The Addl. Commissioner imposed penalties on the company and individuals under relevant sections of the Central Excise Act and Rules. The Commissioner (Appeals) upheld some penalties but set aside the duty demand related to SSI exemption. The Revenue's appeals sought to reinstate the original duty demand and penalties. The judgment analyzed the use of the brand name "Dugar Tetenal" in relation to SSI exemption eligibility, referencing past tribunal decisions. The Tribunal noted conflicting views on brand name usage and SSI exemption entitlement. Ultimately, the Tribunal found that the brand name "Tetenal" indicated a trade connection with M/s. Tetenal Vertribs GmBH, Germany, disqualifying the respondent company from SSI exemption. Consequently, the duty demand and penalties were reinstated, overturning the Commissioner (Appeals) decision.
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