2015 (9) TMI 249 - HC - Central Excise

SSI Exemption - Use of brand name - significance of evidence - Held that - The impugned order has discussed in a great detail the inter-relationship between HM and its sister concerns which were also issued a show cause notice by the Department alleging that they had misutilised the exemption under the aforementioned notification and were involved in clandestine removal with a view to evading excise duty. The entire case of the Department hinged upon a single document stated to have recovered from one of the marketing companies namely Technocrat Marketing P. Ltd. ( TMPL ). It is seen from the impugned order the third member that the said document did not mention the nature of the goods, i.e., whether the goods were mixer-grinder, electric press or toasters which were being manufactured by HM and the other sister concerns. There was nothing in the said document or any other document recovered to indicate that these sales figures pertained to mixer-grinders manufactured by HM. In the absence of any evidence except the single document, which had no description of the goods, the third member to whom the matter was referred was justified in concluding the said document purporting to be a sales statement cannot be treated as containing the figures of sale of Maharaja brand mixer-grinders manufactured and cleared by HM during 1987 . It was also rightly observed that while the document at best gives rise to doubts about the claim of HM regarding their eligibility for SSI exemption during 1987-88, it is insufficient, even on a preponderance of probabilities, to constitute proof for establishing the allegations of duty evasion against the assessee. - No substantial question of law arises - Decided against Revenue.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Availing of exemption by small-scale industry under Notification No. 175/86-CE.

Condonation of Delay:
The judgment addresses an appeal with a significant delay of 577 days in challenging the final order of the Central Excise & Service Tax Appellate Tribunal. The petitioner's explanation for the delay was the delayed receipt of the certified copy of the impugned order. However, the court found this reason inadequate, citing previous legal precedents emphasizing the need for government bodies to provide reasonable and acceptable explanations for delays. The court, following established principles, declined to condone the delay and dismissed the application accordingly.

Availing of Exemption under Notification No. 175/86-CE:
The core issue in the case pertains to the availing of exemption by a small-scale industry under Notification No. 175/86-CE. The case involved the brand name 'Maharaja' owned by individuals associated with Hindustan Machines (HM), a manufacturer of household goods. The Department alleged misutilization of exemption and clandestine removal of goods to evade excise duty by HM and its sister concerns. The case primarily relied on a single document recovered from a marketing company, Technocrat Marketing P. Ltd. However, the document lacked specifics regarding the goods and failed to establish the allegations conclusively. The court found that the document did not provide sufficient evidence to prove duty evasion against the assessee. After thorough examination of the facts, the court upheld the findings of the Central Excise & Service Tax Appellate Tribunal and the Commissioner, concluding that there was no substantial question of law necessitating court intervention. Consequently, the appeal was dismissed on both procedural and substantive grounds.

This detailed analysis of the judgment highlights the court's decisions regarding the delay in filing the appeal and the substantive issue of availing exemption under Notification No. 175/86-CE, providing a comprehensive understanding of the legal reasoning and outcomes in the case.