2004 (6) TMI 354 - AT - Central Excise

Tribunal Waives Pre-Deposit for Duty & Penalty, Citing SSI Notification & Brand Use Exception

The tribunal granted the application for waiver of pre-deposit of duty and penalty arising from the Commissioner's order confirming duty amounts and ... Stay/Dispensation of pre-deposit - SSI Exemption Issues: Application for waiver of pre-deposit of duty and penalty arising from Commissioner's order confirming duty amounts and penalties.The judgment addresses the applications for waiver of pre-deposit of duty and penalty stemming from the Commissioner of Central Excise, Surat's order confirming duty amounts and penalties on various entities. The duty amounts and penalties were confirmed on M/s. Somani International, M/s. Mahesh Texturisers, Mr. Shankar S. Somani, and Mr. Mahesh S. Somani. The demands were made due to the contention that the benefit of Notification 1/93-C.E. for small-scale units was not available to the companies as they used the brand name 'Sumilon' of M/s. Sumeet Synthetics Limited for the texturised yarn they manufactured.Upon careful consideration of the submissions, the tribunal found merit in the applicants' argument that prima facie, the benefit of the SSI notification should be granted. This decision was based on the fact that the brand names were affixed on packing slips of textured yarn by the applicants, who were job workers, and the yarn was sent for twisting and subsequently sold by M/s. Sumeet Synthetics Limited. The tribunal concluded that the use of the brand name was not 'in the course of trade.' This interpretation was supported by the decision of the Larger Bench of the Tribunal in the case of Prakash Industries v. CCE, Bhubaneswar, and subsequent cases like Kohinoor Elastic (P) Ltd. v. CCE, Indore-II, and Ambaji Syntex Pvt. Ltd. v. CCE, Surat-I. Consequently, a strong prima facie case for waiver was established, leading to the tribunal dispensing with the pre-deposit of duties and penalties and staying the recovery pending the appeals.