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TMI Blog2019 (1) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the demand of duty as indicated on the ground that the Relays cleared by them were to be assessed in terms of Section 4A of The Central Excise Act, 1944 and not under Section 4. Penalty and demand of interest has also been upheld. 2.2 The Appeal at Sl No 2 & 3 is directed against the order of Commissioner. By the said order demand of duty has been made by invoking the extended period of limitation as provided by proviso to Section 11A (1). Demand has been made on the ground that appellants have been using the brand name 'PLA Relays' which was not owned by them and not registered in their name. Demand was has been confirmed holding that the Relays cleared by them are liable for assessment under Section 4A and not under Section 4. Penalty has also been imposed on the partner who is also in appeal. 2.3 Appeal at Sl No 4 & 5 are directed against order of Commissioner (Appeal). Appeal at Sl No 4 is filed by the appellants (assessee) and the one at Sl No 5 is filed by revenue. Appeal of party is directed against the order of Commissioner (Appeal), upholding the demand of duty as indicated on the ground that the Relays cleared by them were to be assessed in terms of Section 4A of T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn sold them in retail through their network of dealers. The sub dealers sold the relays either in retail from their shops or to the retailers in the market. 3.8 In their statement recorded under Section 14, M/s Planet Electronics, to bring on record the manner of marketing network, it was admitted that the goods were sold through the network of dealers in retail. 3.9 On the basis of then investigations proceedings were initiated against the appellants by issuance of Show Cause Notice dated 04.04.2007. Subsequently two more show cause notices dated 14.01.2008, & 01.04.2008 have been issued to the appellants. 3.10 Appellants contested all the three show cause notice. The Notice dated 04.04.2007 was adjudicated by the Commissioner and the other two were adjudicated by the officers below in rank to the Commissioner. Accordingly first appeal against these order went to Commissioner (Appeal). 3.11 Aggrieved by the orders of Commissioner and Commissioner (Appeal) appellants are now in appeal before us. 4.1 We have heard Shri Nivan Mainker Learned Advocate for the appellant and Shri A B Kulgod Assistant Commissioner and Shri N N Prabhudesai Superintendent, Authorized Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f extended period of limitation. 4.2 Arguing for the revenue learned Authorized representative submitted i. Appellant cleared the goods in retail market by mentioning on the package "INDUSTRIAL PRODUCT EXCLUSIVE USE OF INDUSTRIES AS INTERMEDIATE / FOR SERVICING INDUSTRIES NOT INTENDED TO BE DISPLAYED FOR SALE AT RETAIL OUTLET". These goods were actually sold by number in the retail market through dealer network. ii. Appellants were using the brand "PLA Relays" on the goods cleared by them during the period September 2002 to September 2007. The words "RELAYS" used on the label was to create a subterfuge in order to fraudulently claim the benefit of the said concessional rate under notifications. The brand "PLA" was also used by M/s PLA Components and they were paying duty at full rate. iii. Registrar of Patents and Trade Marks have vide their letter TMR/ Central Excise/05/07-08 dated 13,09.2007 informed that "PLA is applied and registered in the name of M/s PLA Electro Appliances Pvt Ltd upto 22.07.2013. iv. The goods in the present case are the goods which are notified for the purpose of assessment under Section 4A. Also as per SWMR, these goods have actually been sold in reta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ik [2014 (311) ELT 113 (T-Mum) held as follows: "15. Issue No. A: The said issue came up before the Hon'ble High Court of Bombay in the case of Larsen & Toubro Ltd. (supra) as that whether the valuation of E/1143/2009,90,91/2010,89384,89746/12 2013 goods for the levy of excise duty, whether the provisions of Section 4 or 4A of the Central Excise Act, 1944 are applicable. 16. The contention of the appellant is that as per the explanation to Rule 2A of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 that as the package commodities are meant for industrial or institutional consumers therefore they are not liable to affix MRP on their products accordingly they are out of the purview of Section 4A in that case. But the Hon'ble High Court of Bombay has held that appellants are required to affix MRP on the impugned goods. Further, the contention of the appellant is that the decision of Hon'ble High Court in the case of Larsen & Toubro Ltd. (supra) has been challenged before the Hon'ble Apex Court and appeal against the said order has been admitted and it is also contended that the decision of Larsen & Toubro Ltd. is based on the decision of Whirlpool India Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal. Therefore, the judgment of this Tribunal in the case of Tex Age (supra) will not cease to be binding precedent". As the decision of the Hon'ble High Court of Bombay in the case of Larsen & Toubro Ltd. (supra) has not been set aside by the Hon'ble Apex Court. Therefore in the light of the judgment in the case of Shri Chamundi Mopeds Ltd. the judgment of the Hon'ble High Court of Bombay in the case of Larsen & Toubro Ltd. (supra) is a law of land as on today. Therefore, we hold that the appellants are required to affix MRP on the impugned goods." In view of the above decision we are of the view that assessment of the goods manufactured and cleared by the appellants is required to be done in terms of Section 4A of the Central Excise Act, 1944. 5.3 It is an admitted fact the appellants were using the brand name on their goods which did not belonged to them but was owned by someone else. Commissioner has in his order recorded as follows: "73. Para 4 stipulates that the exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name whether registered or not, of another person. In this regard it is also observed from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of such goods as reach the market. It does not carve out an exception for goods manufactured for captive consumption. The framers meant what they provided. The exemption was to be available only to goods which did not bear a brand/trade name of another. The reason for this is obvious. If use of brand/trade names were to be permitted on goods manufactured as per the orders of customers or which are to be captively consumed then manufacturers, who are otherwise not entitled to exemption, would get their goods or some inputs manufactured on job-work basis or through some small party, freely use their brand/trade name on the goods and avail of the exemption. It is to foreclose such a thing that clause 4 provides, in unambiguous terms, that the exemption is lost if the "goods" bear a brand/trade name of another." Hon'ble Supreme Court has in case of Parle Bisleri Ltd [2011 (263) ELT 15 (SC)] held as follows: "14. The second issue concerns the question whether the 'code names' used to denote soft drink flavours manufactured by the appellant could in fact be termed as 'brand names' and if so, whether they belonged to another entity. The yardstick in this regard is Explanation VIII w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. were in fact, the owner of the code/brand names. This conclusion is fortified by the fact that it was M/s. PEL Ltd. who transferred the right of the codes when they were sold to M/s. Coca Cola Company in November, 1993. Since the appellant was not the owner of the said brand names in question, the Tribunal was justified in holding that the appellant will not be entitled to the benefit of Notification No. 175/86 and 1/93 for the products with code names G-44T, L-33A, TIIPC, T-IIP, R-66M and K-55T which belonged to M/s. PEL Ltd." In Grasim Industries Ltd [2005 (183) ELT 123 (SC)], Hon'ble Apex Court held "15...... In our view, the Tribunal has completely misdirected itself. The term "brand name or trade name" is qualified by the words "that is to say". Thus, even though under normal circumstances a brand name or a trade name may have the meaning as suggested by the Tribunal, for the purposes of such a Notification the terms "brand name or trade name" get qualified by the words which follow. The words which follow are "a name or a mark". Thus even an ordinary name or an ordinary mark is sufficient. It is then elaborated that the "name or mark" such as a "symbol" or a "monogram" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product as that of a product of Tata Company, as they were supplying their goods to the said company. Thus, the bar created in Clause 4 read with Explanation IX of the Notification is clearly attracted in the present case, disentitling the assessee from the benefit of the exemption notifications under consideration. We are of the opinion that the decision of the Tribunal is clearly erroneous and deserves to be set aside." Thus in view of the facts as determined by the Commisssioner in his order and the decisions of the Apex Court referred above we are of the view that the benefit of exemption under Notification No 9/2002-CE dated 1/3/2002 and 8/2003-CE dated 1/3/2003 has been correctly denied to the appellants. 5.4 On the issue of cross examination Commissioner has in his order para 76, recorded as follows: "76 The assessee has asked for the cross examination of five of the sub-dealers of M/s PLA Electronics as also of panchas in their written submissions. However no such cross examination of the panchas as well as the sub-dealers of the main dealer of M/s PLA Electronics, can be considered as they do not fall under the category of "witness". Their depositions were recorded dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of limitation has not been adjudged by either the adjudicating authority or Commissioner (Appeal), the matter needs to be remanded back to the adjudicating authority for consideration of the issue on limitation. 5.6 Appeal No E/89476/13 has been filed by the revenue against the Order in Appeal No SK/269/M II/2013-14 dtd 14.10.13 for the reason that Commissioner (Appeal) has while setting aside the order of adjudicating authority not imposed any penalty under section 11AC of the Central Excise Act, 1944. Since the penalty under Section 11AC is directly linked to the decision on invocation of extended period of limitation, as has been held by the Apex Court in case of Rajasthan Spinning Mill [2009 (238) E.L.T. 3 (S.C.)] "16. The other provision with which we are concerned in this case is Section 11AC relating to penalty. It is as follows : 11AC. Penalty for short-levy or non-levy of duty in certain cases.- where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced. 18. One cannot fail to notice that both the proviso to sub-section 1 of Section 11A and Section 11AC use the same expressions : "....by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,...". In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A(2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf of the assessees it was also submitted that Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a given case it was open to the assessing officer not to impose any penalty. The Division Bench made reference to Rule 96ZQ and Rule 96ZO of the Central Excise Rules, 1944 (in short the "Rules') and a decision of this Court in Chairman, SEBI v. Shriram Mutual Fund & Anr. [2006 (5) SCC 361] and was of the view that the basic scheme for imposition of penalty under section 271(1)(c) of IT Act, Section 11AC of the Act and Rule 96ZQ(5) of the Rules is common. According to the Division Bench the correct position in law was laid down in Chairman, SEBI's case (supra) and not in Dilip Shroff's case (supra). Therefore, the matter was referred to a larger Bench." After referring to a number of decisions on interpretation and construction of statutory provisions, in paragraphs 26 and 27 of the decision, the court observed and held as follows : "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. "27. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is fixed and the statute provides that it should not exceed a particular limit, that itself indicates scope for discretion but that is not the case here." 23. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. That is what Dharamendra Textile decides." Since the matter in respect of determination of extended period of limitation is being remanded to the original authority the issue in respect of imposition of penalty under Section 11AC is also remanded to the same authority. 6.1 In view of discussions as above the appeals under consideration are disposed as follow: i. Appeal No E/1143/2009 filed by the Appellants is rejected and dismissed. ii. Appeal No E/90/2010 & E/91/2010 filed by the Appellants are allowed by way of remand for considering the request to cross examine the traders. Appeal No E/89384/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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