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TMI Blog2000 (7) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... und 5 meters and 6 power supply valued at Rs. 22,000/- unaccounted in their factory premises. All the goods were seized by the Officers. A show cause notice dated 24-8-1989 was issued to them alleging that goods manufactured by them were affixed/screen printed with brand name 'APLAB's of M/s. Applied Electronics Ltd.; that the brand name was concealed by affixing a sticker having name 'Swicon' over the printed brand name; that all the excisable goods manufactured by them were sold exclusively to M/s. Applied Electronics who in turn sold them all over India. The Collector, under the impugned order, confirmed the demand of Central Excise duty amounting to Rs. 12,76,010.35 p. in respect of goods cleared during the period from October, 1987 to January, 1989; confirmed the duty of Rs. 28,091-31s in respect of goods cleared without payment of duty and seized on 28-2-1989, confiscated the seized goods with an option to redeem the same on payment of fine Rs. 2,00,000/-; imposed penalty as under :- (i) M/s. Swicon Micro System Pvt. Ltd. Rs. 10 lakhs (ii) M/s. Applied Electronics Rs. 5 lakhs (iii) Shri S.K. Nair, General Manager Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper rate and value was not relevant to the demand made in the show cause notice. 3.The learned Advocate also mentioned that the demand is hit by time limit as the demand confirmed is for the period from October, 1987 to January, 1989 and the show cause notice was issued in August, 1989; that larger period of limitation is not invokable as they had filed the classification lists which had been approved by the Department; that it has been held by the Tribunal in C.C.E. v. Muzzaffarnagar Steels - 1989 (44) E.L.T. 552 that before approving the classification list, the Assistant Collector should fully satisfy himself about the particulars of goods being manufactured and the process of manufacture and the relevant facts. He also relied upon the decision in the case of Nestler Boiler Pvt. Ltd. v. CCE, 1990 (50) E.L.T. 613 (T) wherein also it was held that while approving the classification list, the department is expected to study the process of manufacture. 4.Regarding imposition of penalty under Rule 209A of the Central Excise Rules, the learned Advocate submitted that the penalty under the said Rule can be imposed only if the person who has acquired or dealt with the excisable go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plates bearing their name which were affixed by Swicon on the excisable goods and as such there is no doubt that the brand name 'APLAB' was affixed by Swicon on the goods manufactured by them, and accordingly the mischief of para 7 of Notification No. 175/86 is attracted. Regarding the claim of the appellants that further process was done at the premises of Applied Electronics the learned D.R. submitted that it is not their case that the impugned goods at the time of clearance from the factory premises of Swicon were semi-finished goods; that in any case in normal course semi-finished goods are not affixed with brand name; that the classification list filed by Swicon was in respect of fully finished product and not the parts of the products; that as such the products manufactured and cleared by Swicon were not eligible for exemption under Notification No. 175/86. The learned DR further submitted that M/s. Applied Electronics played fraud by taking higher notional credit and removing the sticker and selling the goods on their own; that there was deliberate intention to evade payment of duty on their part. He also referred to the findings of the Collector to the effect that no manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessee and it cannot be said that he was not aware of the clearance of the goods without payment of duty and of using brand name of 'APLAB' belonging to M/s. Applied Electronics; that Shri L.S. Sannabhadta is Director of M/s. Swicon and Shri S.P. Joshi is Director in both M/s. Swicon and Applied Electronics and there is no averment that these persons were not looking after day to day business of both the Assessees; that further Shri S.K. Nair, in his statement recorded under Section 14 of the Central Excise Act, had clearly admitted that the goods were manufactured as per the specification and standards of M/s. Applied Electronics on which they affixed the brand name 'APLAB' and sticker bearing their name Swicon were affixed on the brand name 'APLAB' so as to camouflage the brand name of Applied Electronics. He, therefore, concluded that all the ingredients specified in Rule 209A are satisfied and penalty is imposable on the appellants. 8.Shri Rohan Shah, learned Advocate in reply, referred to the statement of Shri J. Castelleno who was working as General Manager of Applied Electronics; that Castelleno has stated in his statement that equipment sold to Applied Electroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing the logo and name of the customers which were hotel, Indian Airlines, who were using the soaps for their own establishment and were not selling further. Similarly, in Prakash Industries case the Appellants therein were manufacturing HDPE sacks bearing the brand name of buyer who was using those sacks for packing cement manufactured by them. In the light of these facts the Tribunal has held in both the cases that the goods were not sold in the course of trade whereas in this case Applied Electronics are selling the goods received from Swicon in the market and the goods enter in the market stream and it cannot be said that the use of brand name does not indicate connection between the goods and the brand name. We do not find any substance in the submissions of the learned Advocate that the goods were further processed by Applied Electronics. Even query from the Bench he could not tell the process undertaken by Applied Electronics on the goods received from Swicon. No doubts, in his statement, Shri J. Castelleno had stated that the goods were in semi-finished condition, but no material has been brought on record to contradict the findings given by the Commissioner in the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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