2013 (8) TMI 842 - AT - Central Excise

SSI Exemption - Use of brand name of others -manufacture of threaded screw made of iron and steel, commonly known as wood screws falling under Heading 7318.10 of the Schedule to the Central Excise Tariff Act, 1985 - Held that - There was no positive and tangible evidence to hold against the appellant - The entire case of the Revenue was based upon the surmises and conjectures - And it was not justifiable to confirm the demand or to impose penalty upon the appellant on the basis of assumption and presumption - Merely because the full address of the buyers in respect of cash sales were not given in the invoices, thus not making it possible for Revenue to conduct inquiries at their end, by itself cannot be held to be a strong evidence to hold that all those clearances were with the brand name of needle fold . Prima facie a credit invoice to a person who cannot be located or to a person who denied receipt of the goods was more incriminating than goods sold on cash basis where the address of the buyer was found to be wrong - It was also not clear from which entries from which annexures were picked up to arrive at the value on which demand was upheld Decided in favour of Assessee.

Summary

Issues:
1. Allegation of misuse of brand name 'needle fold' for availing SSI exemption.
2. Confiscation of goods and penalty imposed based on seized items packed under 'needle fold'.
3. Allegation by Revenue on past clearances under 'needle fold' brand name.
4. Retraction of statement by appellant and partner of 'needle fold' brand.
5. Investigation results on credit and cash sales, lack of evidence on brand name use.
6. Confirmation of demand and penalty on cash sales with incomplete buyer details.
7. Reliance on retracted statement and presence of branded goods during seizure.
8. Lack of evidence on past clearances under 'needle fold' brand, absence of conclusive proof.
9. Lack of tangible evidence, case based on assumptions, appeal allowed.

Analysis:
1. The appellant, engaged in manufacturing wood screws under Heading 7318.10, availed SSI exemption but faced allegations of misusing the brand name 'needle fold' to evade duty.
2. Central Excise officers seized goods packed under 'needle fold', leading to confiscation and penalties, although separate proceedings were initiated for this issue.
3. Revenue alleged past clearances under 'needle fold' based on a statement by the appellant's proprietor, resulting in a demand of duty and penalties.
4. Retraction of the statement by appellant and partner of 'needle fold' raised doubts on the brand name usage, but the appellate authority considered the retraction an afterthought.
5. Investigation revealed discrepancies in credit and cash sales, with lack of evidence on brand name use, leading to the dismissal of duty demand on credit sales.
6. Demand and penalties were confirmed on cash sales due to incomplete buyer details, indicating brand name usage based on seized goods and statements.
7. The reliance on the retracted statement was questioned, and the presence of branded goods during seizure was explained as a temporary packing arrangement.
8. Lack of concrete evidence on past clearances under 'needle fold' brand name weakened Revenue's case, especially with the appellant's own brand name usage.
9. The judgment highlighted the absence of tangible evidence, criticized the case based on assumptions, and allowed the appeal, providing relief to the appellant.