2014 (1) TMI 376 - AT - Central Excise

SSI Exemption - Brand name - Demand - Limitation - Interpretation of statute Held that - There is nothing on record to show that the order in appeal of Commissioner (Appeals) was appealed against by the Revenue - if the brand name is being used on two different products, the debarring clause of small scale exemption notification would not get attracted - Following CCE Chandigarh vs. Fine Industreis 2002 (10) TMI 114 - CEGAT, COURT NO. II, NEW DELHI and CCE Chandigarh vs. M/s. Bhalla Enterprises 2004 (9) TMI 109 - SUPREME COURT OF INDIA - no malafide suppression or mis-statement can be attributed to the appellant - the major part of the demand is beyond the normal period of limitation, the appeal allowed on the point of time bar confiscation of goods and imposition of penalty set aside Decided in favour of assessee.

Summary

Issues:
1. Denial of small scale exemption notification due to brand name ownership.
2. Confiscation of goods and imposition of penalties.
3. Interpretation of law regarding the use of brand names on different products.
4. Time bar for demand quantification.

Analysis:
1. The case involved the appellants, who were manufacturing valves and cocks under the brand name 'Kirti' and availing the small scale exemption notification. Show cause notices were issued alleging that the brand name 'Kirti' belonged to another company using it for pipes, leading to a demand of Rs.1,18,586. Further, another notice proposed confiscation of goods and penalties. The lower authorities confirmed the demand and penalties, which were upheld by the Commissioner (Appeals).

2. The appellants claimed ownership of the 'Kirti' brand for 35 years and highlighted dropped show cause notices on similar grounds. Referring to legal precedents, it was noted that using the same brand name on different products might not attract the debarring clause of the exemption notification. Citing relevant judgments, the Tribunal found no malafide intent by the appellants, especially after subsequent legal clarifications. As a major part of the demand was beyond the limitation period, the appeal was allowed on the point of time bar, with the remaining demand to be quantified within the limitation period.

3. Regarding penalties and confiscation of goods, the Tribunal deemed them unnecessary based on the discussions. Consequently, the confiscation of goods and imposition of penalties were set aside. The appeal was disposed of accordingly, with the decision pronounced in open court by Ms. Archana Wadhwa on behalf of the Bench.