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2015 (2) TMI 343 - AT - Central ExciseBenefit of SSI Exemption under Notification No.8/2003 dated 01.03.2003 - Use of other company s brand name - Invocation of extended period of limitation - Interest u/s 11AB - Penalty u/s 11AC - Benefit of cum-duty - Held that - It is claimed that an application has been made on 13.11.2006 wherein Trade Mark Authority was requested for correction of clerical error in their application and as per the said application the name of the applicant was to be changed as Mr. Satish V. Shetty, Sole Proprietor of the appellant firm. It is not clear from the documents submitted what happened to the said application. To our mind, change of applicant cannot be considered as clerical error that also after more than a year. Moreover, we find that M/s. Bharat Cafi Pvt. Ltd. has submitted a letter dated 19.04.2011 addressed to the Registrar of Trade Mark, Mumbai. - From the said letter it is very clear that M/s. Bharat Cafi Pvt. Ltd. has filed an application on 22.09.2005. Further the application was accepted and advertised vide TMJ 1373 Regular on 01.08.2007. The letter further states that they are withdrawing the said trade mark application. We note that this letter of M/s. Bharat Cafi Pvt. Ltd. very clearly indicates that during the period from 22.09.2005 to 19.04.2011 the said brand name belongs to them. The period of dispute in the present case is from October 2005 to 16.07.2007 and even the advertisement was made on 1.8.2007. - no hesitation in holding that the said brand name belongs to M/s. Bharat Cafi Pvt. Ltd. during the material period. After the said letter Proprietor of the appellant Co. was summoned but he did not respond on some or the other pretext and it was after collecting the detailed information the Revenue officer took further steps in the investigation during 2007. Thus the said letter was sent to the department during the course of investigation of the case and therefore the appellant cannot claim that he had informed the department. We also note that in the said letter it clearly suppresses the fact that brand name of Ribbons and Balloons belongs to M/s. Bharat Cafi Pvt. Ltd., and appellant is using the same consequence to a deed of agreement. We are in agreement with the learned A.R. s contention that the Proprietor of the appellant firm is one of the Directors in M/s. Bharat Cafi Pvt. Ltd. and is the main promoter and hence it cannot be assumed that the appellant s firm was not aware of the fact that the said brand name belongs to M/s. Bharat Cafi Pvt. Ltd. In fact, conduct of the appellant proves his willful intention to evade duty. Under the circumstances, we hold that extended period of limitation is correctly invoked. After crossing exemption limit during 2006-07 (i.e. w.e.f 9.11.2006) they started paying full duty and therefore Revenue cannot demand duty again for the said period. We find force in the argument of the appellant. From the annexure to the show-cause notice as also various ER-1 returns submitted before the Tribunal it is clear that w.e.f 9.11.2006 to 31.03.2006 the appellant has paid full rate of duty as they had crossed the SSI exemption limit. Thus the goods during this period were cleared on payment of duty at normal rate. Department cannot demand the duty again and this part of the demand is therefore, set aside. Benefit of cum-duty - after crossing SSI exemption limit the appellant has themselves paid the duty. Under the circumstances in our view the appellant is entitled to the benefit of cum-duty. Impugned order is upheld on merits including extended period of limitation however, demand of duty during 9.11.2006 to 31.3.2007 is set aside as the appellant had already paid the duty. Further for remaining demand, the appellant would be entitled to cum-duty benefit. Original authority is directed to recompute the duty in above terms. The penalty under Section 11AC will also come down in view of the fact that the duty liability of the appellant will come down after excluding the clearances from 9.11.2006 to 31.3.2007 and extending the benefit of cum-duty. The original authority will accordingly impose penalty under Section 11AC equal to the duty after re-computation - Interest is also to be computed thereafter - Appeal disposed of.
Issues Involved:
1. Ownership of the brand name "Ribbons and Balloons." 2. Eligibility for SSI Exemption under Notification No. 8/2003. 3. Invocation of the extended period of limitation. 4. Demand of duty for the period after crossing the SSI exemption limit. 5. Entitlement to cum-duty benefit. 6. Imposition of penalty under Section 11AC. Issue-wise Detailed Analysis: 1. Ownership of the Brand Name "Ribbons and Balloons": The appellant contended that the brand name "Ribbons and Balloons" belonged to them and not to M/s. Bharat Cafi Pvt. Ltd. They argued that M/s. Bharat Cafi Pvt. Ltd. was only in the hotel business and never manufactured or traded the goods in question. However, the Tribunal found that M/s. Bharat Cafi Pvt. Ltd. had applied for the registration of the brand name on 22.09.2005, and a provisional certificate was issued. Furthermore, an assignment agreement dated 21.09.2005 indicated that the brand name belonged to M/s. Bharat Cafi Pvt. Ltd. during the material period. Therefore, the Tribunal concluded that the brand name belonged to M/s. Bharat Cafi Pvt. Ltd. 2. Eligibility for SSI Exemption under Notification No. 8/2003: The Tribunal examined Condition No. 4 of Notification 8/2003, which states that the exemption does not apply to goods bearing a brand name or trade name of another person. Since the brand name "Ribbons and Balloons" belonged to M/s. Bharat Cafi Pvt. Ltd., the appellant was not entitled to the benefit of SSI Exemption under the said notification. The appellant's argument that M/s. Bharat Cafi Pvt. Ltd. was not a manufacturer, trader, or seller of the goods was deemed irrelevant. 3. Invocation of the Extended Period of Limitation: The appellant argued that the extended period of limitation could not be invoked as they had informed the department about manufacturing under the brand name "Ribbons and Balloons." However, the Tribunal found that the appellant's letter dated 13.06.2006 was sent during the investigation and did not disclose that the brand name belonged to M/s. Bharat Cafi Pvt. Ltd. The Tribunal agreed with the Revenue's contention that the appellant's conduct indicated a willful intention to evade duty. Therefore, the extended period of limitation was correctly invoked. 4. Demand of Duty for the Period after Crossing the SSI Exemption Limit: The appellant contended that they had started paying full duty after crossing the SSI exemption limit on 09.11.2006. The Tribunal found merit in this argument and noted that the appellant had paid the duty at the normal rate from 09.11.2006 to 31.03.2007. Consequently, the demand for this period was set aside. 5. Entitlement to Cum-Duty Benefit: The appellant argued for the benefit of cum-duty, which means that the duty should be considered as included in the sale price. The Tribunal found merit in this argument and distinguished the present case from the Supreme Court's decision in Amrit Agro Industries Ltd., where the dispute was about the excisability of goods. Since there was no such dispute in the present case, the appellant was entitled to cum-duty benefit. 6. Imposition of Penalty under Section 11AC: Given the reduction in duty liability after excluding the clearances from 09.11.2006 to 31.03.2007 and extending the benefit of cum-duty, the penalty under Section 11AC would also be reduced. The Tribunal directed the original authority to recompute the duty and impose a penalty equal to the recomputed duty. Interest was also to be computed accordingly. Conclusion: The Tribunal upheld the impugned order on merits, including the extended period of limitation. However, the demand for the period from 09.11.2006 to 31.03.2007 was set aside as the appellant had already paid the duty. The appellant was granted cum-duty benefit, and the original authority was directed to recompute the duty and penalty accordingly. The appeal was disposed of in these terms.
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