2017 (8) TMI 1095 - AT - Central Excise

Classification of goods - switches plugs sockets fuses lamp holders and ceiling roses - whether the goods conform to Indian Standard and whether the goods manufactured were branded or not - Natural Justice - Held that - We are not provided with material to appreciate whether the appellant-assessee was the owner of the brand-name. The assignment deed may be of different formats. But its contents are relevant. Therefore it is primary duty of the adjudicating authority to examine the contents of the assignment deed thoroughly and also enquire as to whether by virtue of the assignment deed the brand name was owned by the assessee exclusively. On the basis of outcome of his examination and enquiry he shall be in a position to reach to a proper conclusion and decide notification benefit if any admissible. While carrying out such exercise learned Authority shall also examine minutely all the other conditions specified in the notifications. During the course of scrutiny appellant is entitled to a fair opportunity of hearing to plead on facts and law as well as adduce evidence if any. It is surprising to note that while issuing a notice on 29/07/1994 learned Authority had all facts and figures with him for the period beginning from 08/09/1989 till 31/03/1994. He again issued a notice on 27/09/1994 covering the same period from 28/09/1989 to 31/03/1993 although that may be for different goods and different periods are covered. Authority did not stop there. He issued further notice on 30/06/1995 covering the period from 01/08/1994 to 31/03/1995. This has resulted in multiplicity of litigation. He should state the reasons of issuance of such multiple notices specifically against each such notice and covering relevant period in his re-adjudication order. Limitation issue may be considered in the re-adjudication. Matter remanded to the adjudicating authority to afford reasonable opportunity of hearing to both and pass an appropriate order - appeal allowed by way of remand.

Issues Involved:
1. Classification of goods
2. Conformity to Indian Standard (ISI) specifications
3. Admissibility of Notification No. 144/89
4. Ownership of brand name
5. Enlarged demand of duty
6. Issuance of multiple show-cause notices
7. Limitation issue

Detailed Analysis:

1. Classification of Goods:
The primary dispute before the Tribunal was regarding the classification of the goods and whether they conformed to Indian Standard specifications. The Tribunal noted that the learned Commissioner did not consider two grounds proposed in the notice for denial of the exemption, leading to the remand for fresh adjudication.

2. Conformity to Indian Standard (ISI) Specifications:
The re-adjudication order dated 30/11/2005 included a table detailing various products, their classification under the tariff chapter, and their conformity to ISI specifications. The adjudicating authority had to determine whether the goods met ISI standards, which was a prerequisite for availing the exemption under Notification No. 144/89.

3. Admissibility of Notification No. 144/89:
The appellant argued that to benefit from Notification No. 144/89, the goods must be switches, plugs, sockets, fuses, lamp holders, and ceiling roses falling under heading 85.36 of CETA, 1985. Additionally, three conditions had to be satisfied:
- Goods should be manufactured using hand-operated presses for molding operations.
- No power should be used after molding except for buffing or testing.
- Goods must conform to Indian Standard and bear the Standard Mark as defined under the Bureau of Indian Standards Act, 1986.

4. Ownership of Brand Name:
The appellant contended that the adjudicating authority failed to consider that the goods were in conformity with ISI standards without a brand name. The appellant claimed ownership of the brand name under an assignment deed, arguing that the brand name was not of a different person. The Tribunal directed the adjudicating authority to thoroughly examine the contents of the assignment deed to confirm whether the brand name was exclusively owned by the appellant.

5. Enlarged Demand of Duty:
The appellant's grievance was that while the show-cause notice demanded duty of ?68,54,995/-, the adjudication resulted in a higher demand of ?73,92,272/-. The Tribunal instructed the adjudicating authority to scrutinize whether this discrepancy was due to a mathematical error or substantive grounds and to confine the jurisdiction to the allegations in the show-cause notice.

6. Issuance of Multiple Show-Cause Notices:
The Tribunal observed that multiple show-cause notices were issued for overlapping periods, potentially leading to repetitive litigation. The adjudicating authority was directed to provide specific reasons for issuing multiple notices and to ensure no repetitive taxation for the same period, following principles laid down in Nizam Sugar Factory v. Collector of Central Excise and Hyderabad Polymers (P) Ltd v. Commissioner of Central Excise.

7. Limitation Issue:
The appellant raised the limitation issue, which the Tribunal directed the adjudicating authority to examine. The authority was to consider the facts of each notice and the periods involved to reach a proper conclusion on the limitation issue.

Conclusion:
The Tribunal remanded the appeals to the adjudicating authority with directions to afford a reasonable opportunity of hearing to both parties and pass an appropriate order by 30/09/2017. The adjudicating authority was instructed to examine the assignment deed, scrutinize the enlarged demand, provide reasons for multiple notices, and address the limitation issue thoroughly.

← Previous Next →