9911796707
TMI Blog2002 (12) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the factory premises of the applicant on 18-11-97 and 19-11-97. During the course of search they found 149 plastic tanks of capacity exceeding 300 Ltrs valued at Rs. 7,08,393/- bearing brand name National, lying in factory premises. The scrutiny of records seized and further investigations revealed following facts :- (a) The applicant was registered under Central Excise Act, 1944 during the period 1993-94 and 1994-95; (b) The applicant had surrendered it s licence during 1995-96 as its turnover of dutiable goods was below the limit prescribed for small scale unit i.e. of Rs. 30 lac. He filed declaration for the period 1995-96 but did not file any declaration for the period 1996-97 and 1997-98; (c) During the period 1994-95 to 1997-98 the applicant had cleared plastic tanks of capacity exceeding 300 Ltrs; totally worth Rs. 2,56,88.472/- (including value of tanks seized at customers places) however had shown clearances of the same as Rs. 1,08,33,503/- only, manipulating his record, by showing clearances of tanks of capacity below 300 Ltrs. (d) The applicant had cleared the said tanks under the brand name National belonging to another assessee viz M/s. Nati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98 he accepted use of National brand name, as alleged in SCN. c) He claimed deduction on account of sales tax paid during 1995-96 to 1997-98. (d) He claimed to treat remaining amount as cum-duty price. (e) For 1994-95 he claimed SSI benefit. (f) For 1995-96 to 1997-98 he did not claim SSI benefit but claimed Modvat credit of Rs. 29,31,024/-. (g) The duty of Rs. 1,57,549/-, demanded for undervaluation of goods, was accepted as payable. 7. The Commission directed Revenue to submit the record relied upon in the case for scrutiny. On receipt of certain record from the Revenue, the Commission directed Commr.(Inv.) and Revenue to submit Report on certain points. 8. Commissioner (Inv.) submitted investigation Report on 25-1-2002, inter alia, suggesting that no Modvat credit can be granted to the applicant since the applicant had failed to follow the mandatory provisions prescribed under the Rules. Further, it was reported that report on certain points could not be finalised as the Revenue did not submit all the relied upon record. The Revenue also submitted Report in the matter on 4-2-2002. 9. The matter was heard on 5-2-2002. Vide Interim Order No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the applicant is eligible for SSI benefit though using the said brand name. (d) In case Commission is not inclined to grant Modvat credit, the applicant is prepared to pay duty without Modvat credit but with SSI benefit. (e) Taking into consideration, the deduction on account of sales tax paid and then treating remaining amount as cum duty price, the applicant accepted to pay total duty of Rs. 22,14,921.40 as payable. 15. The Advocate s letter was sent to Revenue for comments. The Revenue vide Report dated 26-9-2002 opined that the applicant was neither eligible for Modvat credit not for SSI benefit. 16. The hearing fixed in the matter was adjourned to 27-11-2002 and then to 24-12-2002, on applicant s request. 17. The final hearing was held on 24-12-2002. 18. The Applicants, M/s. Sagar Plastics, Ahmedabad and Shri Jayantibhai Patel, Partner, were represented by Shri V.M. Doiphode, Advocate, Shri Jayantibhai Patel, Partner. 19. The ld. Advocate submitted that the applicants may be given the benefit of (i) either to avail Modvat credit for the inputs used or (ii) SSI benefit during the relevant period. It was further submitted that the Revenue has calculated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ahmedabad when shown a letter dated 29-4-94 of M/s. National Plastics addressed to the Superintendent C.Ex Range- II, Division - II, Ahmedabad, (wherein M/s. National Plastics have declared that ownership of the said brand is that of National Plastics) confirmed that NATIONAL brand is owned by M/s National Plastics, Ahmedabad. Their argument at this stage that the said brand is not owned exclusively by any body is an afterthought and hence not acceptable. 24. The Revenue also filed a copy of the judgment in the case of Micro Nova Pharmaceuticals (P) Ltd. v. Commissioner of Central Excise, Bangalore -1997 (92) E.L.T. 172 (Tribunal). 25. The contention of the Revenue was that the applicant should neither be given SSI benefit nor any Modvat credit and that the applicants are liable to pay duty as demanded in the Show Cause Notice. 26. The Commission has gone through the records of the case and the submissions made by the applicants and the Revenue. 27. In this case the main issue involved now is whether the applicant is entitled for SSI benefit though he was using the brand name National . 28. The provisions of law in this regard are discussed below : The proviso 4 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iding whether or not paragraph is attracted. Paragraph 4 of the notification provides that The exemption contained in this notification shall not apply to the specified goods, bearing the brand name or trade name (registered or not) of another person. The Commissioner (Appeals) s view is thus clearly wrong, and neither the counsel for the manufacturer, nor the Departmental representative, supports it. The appeal emphasis that the affidavit filed by the partner of M/s. J.K. Brothers is insufficient to conclude that the ownership of the brand name ceased to vest with M/s. J.K. Brothers. Before confronting this question, another has to be answered. The manufacturer had challenged the presumption in the show cause notice that the brand name belonged to M/s. J.K. Brothers. The brand name was not registered with the appropriate authorities. There is no other evidence of ownership by J.K Brothers of this brand name. The use by it of the brand name has to be distinguished from its ownership of that name. If J.K. Brothers were not the legal owner of the brand name, it did not have the right to exclusive use of it. The name remained in the public domain, and anyone was free to use it. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as that in case of Micro Nova, they were using the brand name which was exclusively owned by Micro Labs. The case before us is a case where the brand name National seems to be freely usable by all and sundry because this is the name not registered by any particular individual, firm or company. 38. Since the applicant is entitled to the SSI exemption Notification No. 1/93-C.EX. right from 94-95 to 97-98, the duty liability in this case would work out to Rs. 20,57,372/- after taking into account, the benefit of the said notification and after treating the value as cum-sales tax. In addition to that, the duty liability Rs. 1,57,549/- would also be payable by the applicant on account of the differential price between the applicant s depots and applicant s factory. Thus, the total duty liability payable by the applicant shall come to Rs. 22,14,921/-. 39. In view of our above findings, we lay down the following terms of settlement in terms of Section 32E(7) of the Central Excise Act, 1944. Central Excise Duty : The amount of duty payable by the applicant is settled at Rs. 22,14,921/- out of which the applicant has already paid Rs. 14,95,834/-. The balance amount of Rs. 7,19,08 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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