2015 (9) TMI 250 - HC - Central Excise

Denial of SSI Exemption - Use of brand name belonging to other company - Bar of limitation - Held that - it is seen from the order of the Tribunal that the finding of the first appellate authority to the effect that there was no suppression of fact, has not been interfered with. If the original authority had invoked the enhanced period of limitation on only one particular ground viz., suppression of fact and the appellate authority had set aside that finding, the larger period of limitation was not available to the Department themselves in view of the fact that the Tribunal did not interfere with the finding of the first appellate authority relating to the only basis on which the enhanced period of limitation was taken recourse to by the Department. In view of the above, we answer question with regard to limitation in favour of the assessee. - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Notification for Central Excise Act, 1944.
2. Application of limitation period for issuing show cause notice.

Interpretation of Notification for Central Excise Act, 1944:
The appellant, a Small Scale Industry manufacturing linear measuring instruments, entered into a Technical Licence Agreement with a UK company for manufacturing these instruments. A dispute arose when the Department called for full duty payment, alleging the appellant was not entitled to a specific notification's benefit. The issue revolved around whether using the brand name of the foreign collaborator along with the appellant's own name would disqualify the appellant from the notification's benefits. The Tribunal ultimately ruled against the appellant, leading to the appeal. The court framed questions of law, consolidating them into two main queries: the use of a collaborator's brand name affecting notification benefits and the show cause notice's limitation period.

Application of limitation period for issuing show cause notice:
The court first addressed the limitation issue, crucial for the case. Section 11A of the Central Excise Act delineates two limitation periods: one year for routine cases and five years for instances involving fraud, collusion, or suppression of facts. In this scenario, the appellant's registration occurred on 22.11.1995, followed by a demand notice in early 1996 and the actual show cause notice in 1998. The Department alleged suppression of facts to evade duty, but the first appellate authority found no suppression, citing the disclosure of all relevant information by the appellant's Chairman before registration. The Tribunal did not dispute this finding, leading to a ruling in favor of the appellant on the limitation issue. As the enhanced limitation period was not applicable due to the absence of suppression, the other legal questions became irrelevant. Consequently, the court disposed of the appeal in favor of the assessee, emphasizing the closure of the matter without costs.

This detailed analysis of the judgment from the Madras High Court delves into the key legal issues surrounding the interpretation of the Central Excise Act and the application of limitation periods, providing a comprehensive understanding of the case's legal intricacies and the court's final ruling.