2003 (9) TMI 766 - AT - Central Excise

Tribunal Overturns Appeal Denial, Recognizes 'ELEX' Ownership and Grants SSI Exemption Due to Insufficient Evidence.

The Tribunal overturned the Order-in-Appeal, ruling in favor of the Appellants. It found the denial of SSI exemption under Notification No. 1/93-CE to be ... Denial of SSI exemption under Notification No. 1/93-CE - duty demand - manufacture of flat knitting machines - Penalty - HELD THAT:- No statement of any Proprietor/Partner of these firms was recorded. Therefore, the certificates issued by all these firms could not be brushed aside by the authorities below. In the face of the evidence, the retracted alleged confessional statement of Shri Pritam Singh, Proprietor of the appellant’s firm could not be given much credence. The authorities below have wrongly accepted the said statement of Shi Pritam Singh as substantial evidence by ignoring the above said documentary evidence. Apart from this, even otherwise legally it cannot be concluded that the appellants were using the brand name of another person. The brand name ”ELEX”, according to the Department belonged to M/s. Elex Engineering Works. But Shri Pritam Singh who is the proprietor of the appellant’s firm, is one of the partners in that firm. Being co-owner of the brand name in the above said firm, he could not be said to had used the brand name of another person, in the manufacture and clearance of the goods in his individual capacity. He cannot be legally said to be running another firm of M/s. Elex Knitting Machinery, as single person cannot constitute any firm under the law. Therefore, being already co-owner of the brand name, he was competent to use the same. Thus, the benefit of SSI exemption Notification No. 1/93-C.E., dated 28-2-93 could not be legally denied to the Appellants. Therefore, the impugned Order of the Commissioner (Appeals) is set aside. The appeal of the Appellants is allowed with consequential relief, if any, permissible under the law. Issues involved: Denial of SSI exemption under Notification No. 1/93-CE, duty demand, penalty imposition, use of brand name 'ELEX' on flat knitting machines, retracted confessional statement of Proprietor, lack of corroboration, legal ownership of brand name.Summary:Denial of SSI Exemption and Duty Demand:The appeal was filed against the Order-in-Appeal affirming the duty demand and penalties imposed on the Appellants for allegedly using the brand name 'ELEX' on flat knitting machines, thus being ineligible for SSI exemption under Notification No. 1/93-CE.Retracted Confessional Statement and Lack of Corroboration:The denial of SSI exemption was primarily based on the retracted confessional statement of the Proprietor regarding the use of the brand name 'ELEX.' However, the Tribunal found no oral or documentary evidence corroborating this claim, emphasizing the need for independent corroboration as per legal precedent.Documentary Evidence and Certificates:The Appellants presented certificates from various buyers stating that the machines purchased did not bear the brand name 'ELEX.' These certificates were not disproved or found to be false, indicating a lack of evidence supporting the allegation of unauthorized brand use.Legal Ownership of Brand Name:Considering that the brand name 'ELEX' belonged to a firm where the Proprietor was a partner, the Tribunal concluded that he, as a co-owner of the brand, had the legal right to use it in the manufacturing process, thereby rejecting the claim of using another person's brand name.Decision and Conclusion:The Tribunal set aside the Order of the Commissioner (Appeals), ruling in favor of the Appellants and allowing the appeal with any consequential relief as per the law, as the denial of SSI exemption was deemed legally unfounded based on the lack of substantiated evidence and the Proprietor's legal ownership of the brand name.