9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 215 - AT - Central ExcisePenalty u/s 11 AC - demand of duty with interest - valuation - MRP Based valuation on the basis of retail sale price - It is the case of the department when four litre cartons are sold to restaurants and canteens, the valuation has to be adopted under section 4 of Central Excise Act, 1944 and the provision of section 4A would not be applicable - valuation as per section 4 of Central Excise Act, 1944 or under section 4A of Central Excise Act, 1944? - Held that - during the relevant period, the decision in the case of Jayanti Food Processing Pvt. Ltd. 2002 (1) TMI 104 - CEGAT, COURT NO. I, NEW DELHI was in favor of the assessee as per the decision rendered by the Tribunal. There was also doubts and confusions with regard to the valuation to be made in case of goods which are sold on the basis of MRP - the appellant had adopted valuation under section 4A relying upon the decision of the Tribunal prevailing at the time. SSI exemption - use of brand name of others - Held that - The Trademark belongs to Shri Pichai Rajagopal who is also partner in M/s. Saravana Dairy Products since the appellants are not eligible for exemption as the value of clearances exceeds one crore when assessed under Section 4 of Central Excise Act, this issue is not dealt with. The learned consultant did not advance any argument on this second issue. There are no sufficient grounds for imposition of penalty under section 11AC of the Central Excise Act - duty demand with interest upheld - appeal allowed - decided partly in favor of appellant.
Issues:
1. Valuation of ice creams cleared in four-litre cartons for catering purposes under Central Excise Act. 2. Imposition of penalty under section 11AC of the Central Excise Act. 3. Allegation of using another brand name. Analysis: Issue 1: Valuation of ice creams cleared in four-litre cartons for catering purposes under Central Excise Act: The appellants, manufacturers of ice creams under the brand name "Saravana Diary Rich," availed exemption for small scale industrial units. The dispute arose when officers found the appellants clearing ice creams in four-litre cartons labeled for catering only. The department argued that when these cartons were sold to restaurants and canteens, valuation should be under section 4 of the Central Excise Act, exceeding the SSI exemption limit. The appellant contested the penalty under section 11AC, citing the Tribunal's decision in Jayanti Food Processing Pvt. Ltd. The Tribunal considered various judgments, including ITEL Industries Pvt. Ltd. and Ishan Research Laboratories P. Ltd., concluding that the appellant acted in good faith based on prevailing Tribunal decisions. Thus, the valuation under section 4A was upheld, and the penalty under section 11AC was set aside. Issue 2: Imposition of penalty under section 11AC of the Central Excise Act: The appellant contested only the penalty under section 11AC, arguing no intent to evade duty payment. The Tribunal acknowledged the confusion regarding valuation for goods sold based on MRP and accepted the appellant's bona fide belief in applying section 4A for valuation. Relying on the Tribunal's past decisions and the Standards of Weight and Measures Act, the Tribunal held that the penalty under section 11AC was unjustified, setting it aside while upholding the duty demand and interest. Issue 3: Allegation of using another brand name: An additional allegation was raised regarding the use of another brand name. The appellant clarified that the brand name "Hotel Saravana Bhavan" belonged to a family member, not the appellant's business. The department argued that the appellant was not eligible for exemption due to exceeding the one crore limit under Section 4 of the Central Excise Act. However, this issue was not further addressed during the appeal, and no arguments were presented by the appellant on this matter. In conclusion, the Tribunal found no sufficient grounds for imposing a penalty under section 11AC of the Central Excise Act, setting it aside while upholding the duty demand and interest. The appeal was allowed partly based on the above analysis.
|
