2016 (11) TMI 93 - AT - Central Excise

Denial of concessional rate of duty - ordinary Portland cement and clinker - violation of conditions of N/N. 06/2002-CE dated 01.03.2002 - enhancement of installed capacity to 950 T PD - use of brand name of others - Held that - the Commissioner has correctly interpreted the relevant provisions of the notification alleged to be contravened - as per the various notifications issued by Government of India both in Industry Department as well as Revenue Department and also as per the opinion given by Cement Research Institute, New Delhi, the capacity of the grinding mill has to be taken as the capacity of the mini cement plant, since the capacities in all other sections of the plant i.e. raw mill, coal mill and packing machine etc., will have no bearing on the output of the cement. In view of the above while assessing the installed capacity of the cement pl. it is essential to assess the installed capacity of the Grinding Mill Further, the Honourable Board, in their clarification No. 131/3/20-CA dated 08.07.1980, held that the installed capacity should not exceed the limit fixed in the notification and the actual production of cement can be to an extent of 25% more than the installed capacity. Use of brand name of others - Held that - I find that Shree Chakra Gold is used by the assessee and by M/s. Modern Plastic Corporation From the records, I find that M/s. Modern Plastic Corporation is of a recent origin and before the inception of M/s. Modern Plastic Corporation itself, the assessee were using the brand name Shree Chakra Gold, which is also the name of the Company The part brand name being used by the other units can not be equated with the brand name of SCCL, as the same is different. Therefore I hold that no violation of Trade Name clause of the exemption notification is established. Appeal dismissed - decided against Revenue.

Summary

Issues:
Alleged irregular availing of exemption Notification No. 06/2002-CE dated 01.03.2002 leading to short paid duty, denial of concessional rate of duty, imposition of penalties, violation of trade name clause, enhancement of installed capacity, and use of brand names of others.

Analysis:
The case involved the respondents engaged in manufacturing and clearing ordinary Portland cement and clinker, facing allegations of irregularly availing exemption leading to short paid duty. The department issued a show cause notice proposing denial of concessional rate of duty, demanding payment of allegedly short paid duty with interest, and imposing penalties. The lower authority dropped the proceedings initiated in the show cause notice, leading to the appeal.

The department argued that the respondents did not meet the conditions of Notification No. 06/2002-CE, specifically regarding the violation of the trade name clause, which made them ineligible for the Small Scale Industry (SSI) exemption. The main grounds for initiating proceedings were related to the alleged violations of enhancing installed capacity and using the brand names of other entities.

The Commissioner analyzed the allegations and concluded that the installed capacity of the cement grinding mills was less than 900 TPD based on evidence provided by the assessee. The Commissioner also found that the brand name used by the assessee was different from that of the other units, thus not violating the trade name clause of the exemption notification. The Commissioner's interpretation of the relevant provisions of the notification was deemed correct, and no infirmity was found in the impugned order.

Therefore, the appellate tribunal upheld the Commissioner's decision, dismissing the department's appeal as they did not find any merit in it. The operative part of the order was pronounced in court at the conclusion of the hearing.