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2017 (2) TMI 768 - AT - Central ExciseSSI exemption - use of brand name of others - Evasion of duty - Valuation - Short payment of duty - Penalty - Time limitation - Held that - be due to ignorance on the part of the appellant firm, as disinfectant was an item notified under Section 4A during 2006-2007 also and during that period also, the appellant firm paid duty on transaction value under Section 4 while during that period, and as is clear from Annexure D-1 to show cause notice, duty payable on transaction value under Section 4 was more than the duty payable on assessable value determined under Section 4A and as such the appellant had paid excess duty to the tune of ₹ 2,19,478/- - the demand for recovery of this duty raised vide show cause notice dated 10/7/09 is time barred. The denial of SSI exemption under Notification No. 8/03-CE in respect of goods affixed with brand name is linked with the brand name being owned by some other person and, thus, for this purpose what is relevant is the ownership of the brand name - Since, the appellant did not disclose the relevant facts in respect of the clearances of goods affixed with brand name 5 CEES and KILLER without payment of duty, extended period under proviso to Section 11A (1) has been correctly invoked for recovery of the duty short paid on this count. Penalty on Shri Vishal Makhija under Rule 26 of the Central Excise Rules, 2002 has been correctly imposed as admittedly he received non-duty paid goods cleared by the appellant firm - Appeal disposed of.
Issues Involved:
1. Duty demand of ?43,503/- for clearances to M/s M.K. Enterprises. 2. Duty demand of ?3,77,979/- for 2007-2008 due to valuation under Section 4 instead of Section 4A. 3. Duty demand of ?3,76,736/- for goods affixed with brand names "5 CEES" and "KILLER" not eligible for SSI exemption. 4. Penalty of ?1,00,000/- on Shri Vishal Makhija under Rule 26 of the Central Excise Rules, 2002. Issue-wise Detailed Analysis: 1. Duty Demand of ?43,503/- for Clearances to M/s M.K. Enterprises: The duty demand of ?43,503/- in respect of clearances to M/s M.K. Enterprises was not contested by the appellant firm. The Tribunal acknowledged this non-contestation and upheld the duty demand accordingly. 2. Duty Demand of ?3,77,979/- for 2007-2008 Due to Valuation Under Section 4 Instead of Section 4A: The appellant firm contested the duty demand of ?3,77,979/- for the period 2007-2008, which arose due to the payment of duty on transaction value under Section 4 of the Act instead of on the value determined under Section 4A (MRP minus abatement). The appellant argued that the longer limitation period under proviso to Section 11A (1) was not invokable as there was no fraud, wilful misstatement, or suppression of facts. The Tribunal found that the short payment was due to ignorance and not with any intention to evade duty. It was noted that during 2006-2007, the appellant had paid duty on transaction value under Section 4, which was more than the duty payable under Section 4A. Therefore, the Tribunal concluded that the demand for recovery of ?3,77,979/- was time-barred and set it aside. 3. Duty Demand of ?3,76,736/- for Goods Affixed with Brand Names "5 CEES" and "KILLER" Not Eligible for SSI Exemption: The appellant firm also contested the duty demand of ?3,76,736/- for goods affixed with the brand names "5 CEES" and "KILLER," arguing that they were using these brand names under assignment deeds and were thus eligible for SSI exemption. However, the Tribunal found that the assignment deeds only gave the appellant the right to use the brand names, and the ownership of the trademarks continued to vest with M/s M.K. Enterprises and M/s 5 CEES India. The Tribunal cited the case of Vee Gee Faucets P. Ltd. vs. CCE, Gurgaon to support its view that the appellant firm was not eligible for SSI exemption as the brand names did not belong to them. Consequently, the Tribunal upheld the duty demand of ?3,76,736/-. 4. Penalty of ?1,00,000/- on Shri Vishal Makhija Under Rule 26 of the Central Excise Rules, 2002: The Tribunal upheld the penalty of ?1,00,000/- imposed on Shri Vishal Makhija under Rule 26 of the Central Excise Rules, 2002, as he had received non-duty paid goods cleared by the appellant firm. Conclusion: The Tribunal disposed of the appeals with the following decisions: (i) The duty demand of ?43,503/- in respect of clearances to M/s M.K. Enterprises was not contested and thus upheld. (ii) The duty demand of ?3,77,979/- for 2007-2008 was set aside as time-barred. (iii) The duty demand of ?3,76,736/- for goods affixed with brand names "5 CEES" and "KILLER" was upheld. (iv) The penalty imposed on Shri Vishal Makhija under Rule 26 was upheld. (Pronounced in the open court on 06.01.2017)
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