2019 (11) TMI 951 - AT - Central Excise

SSI Exemption - cross-utilisation of brand names - liability to duty was founded on denial of benefit of the exemption notification to both the manufacturer for cross-utilisation of brand names belonging to each other - HELD THAT - It is seen from the orders of the original, as well as the first appellate, authority that even despite acknowledgement of the timelines of dutiability, which impacted the quantity, and valuation under section 4A of Central Excise Act, 1944 and specific submission that the imported goods were sold as such, there is a marked absence of any suggestion to segregate the value for determination of liability - It is, therefore, not ascertainable from the record if the imported goods had been segregated, in terms of the claim of the appellants herein that 90% of the goods were branded and that only 10% remained unbranded or of the denial of exemption notification extended to the entire clearance instead of being restricted to goods on which ineligible brand names were affixed. The impugned order lacks the base essentials that signify disposal of grounds in appeal - the first appellate authority are directed to hear the matter afresh and pass appropriate orders - appeal allowed by way of remand.

Summary

Issues:
Sustainability of evidence leading to findings in the order of the original authority.

Analysis:
The judgment by the Appellate Tribunal CESTAT Mumbai involved appeals by M/s Royal Brushes Pvt Ltd, M/s Royal Enterprises, and Shri Dinesh Hirji Kenia against an order-in-appeal dated 28th July 2011. The primary issue revolved around the sustainability of the evidence that led to the findings in the original order. The appellants were found liable for central excise duties, penalties, and confiscation of goods. The investigation revealed that the appellants were engaged in the manufacturing and sale of toothbrushes under various brand names. The duty liability was determined based on the retail selling price prescribed under the Central Excise Act and the Third Schedule to the Central Excise Tariff Act. The liability was established due to the denial of exemption notification for cross-utilization of brand names and the inclusion of imported toothbrushes for determining eligibility for exemption.

The judgment highlighted the absence of certainty in duty liability, particularly in segregating the value for determining liability. Despite submissions regarding the segregation of branded and unbranded goods, the record did not provide clarity on this aspect. The judgment referenced a previous case to emphasize the requirement for repacking from bulk packs to retail packs to constitute manufacture. The impugned order was found lacking in essential aspects necessary for the disposal of grounds in appeal. Consequently, the Appellate Tribunal set aside the impugned order and directed the first appellate authority to rehear the matter, considering the factual and legal submissions made by the appellants. The appeals were disposed of accordingly, with the order pronounced in open court on 15/11/2019.