2017 (1) TMI 429 - AT - Central Excise

Assessee partially wins appeal, duty accepted with interest, penalty set aside. Revenue's appeal dismissed.

Commissioner of Central Excise, Mumbai Versus Midas Care Pharma P. Ltd. (Vice-Versa)

The appeal filed by the assessee against Order-in-Appeal No. SVS/01/AUR/2005 is partially allowed, with the duty liability accepted along with interest ... SSI exemption - use of brand name - penalty u/s 173Q of erstwhile Central Excise Rules, 1944 - Held that: - we find the issue is of use of Brand name on the products and the benefits of SSI, was agitated before the higher forums. We are of the view that appellant assessee could have entertained a bonafide belief that they are eligible for SSI benefit. In view of this and as the issue is of interpretation we find that the penalty imposed on appellant is unwarranted. Accordingly, the penalty of ₹ 25,000/- is set aside - appeal allowed - decided in favor of appellant. Issues involved:Appeal against Order-in-Appeal No. SVS/01/AUR/2005, withdrawal of Revenue's appeal, duty liability acceptance by assessee, penalty imposition, use of Brand name on products, SSI exemption benefit, demand reduction, interest payment, penalty under Rule 173Q of Central Excise Rules.Analysis:The judgment involves two appeals filed by both Revenue and the assessee against Order-in-Appeal No. SVS/01/AUR/2005. A miscellaneous application by Revenue for withdrawal of their appeal is also considered. The appeals and the miscellaneous application are interconnected and thus disposed of by a common order after hearing both sides and perusing the records.The miscellaneous application filed by Revenue for withdrawal of their appeal is allowed as the amount of duty and penalty sought to be enhanced is less than Rupees Ten lakhs. Consequently, Revenue's appeal is dismissed as withdrawn. As for the appeal filed by the assessee, they accept the duty liability with interest as per the provisions of Section 11AA of the Central Excise Act, 1944, due to the efflux of time. The assessee seeks to set aside the penalty imposed.The main issue in the case pertains to the demand of duty based on the use of Brand name on products by the assessee while claiming the benefit of the SSI exemption. The adjudicating authority initially confirmed a demand of &8377; 4,12,991/-. Upon appeal, the demand was reduced to &8377; 70,462/- along with a penalty of &8377; 25,000/- under Rule 173Q of the erstwhile Central Excise Rules, 1944. The Tribunal confirms the demand of &8377; 70,462/- with interest under Section 11AA and sets aside the penalty of &8377; 25,000/- considering the issue of interpretation regarding the use of Brand name and SSI benefit eligibility.In conclusion, the appeals are disposed of with the confirmation of the duty demand and interest payment by the assessee while setting aside the penalty imposed under Rule 173Q. The judgment reflects a detailed analysis of the issues related to duty liability, penalty imposition, and the interpretation of rules concerning the use of Brand name and SSI exemption benefits on products.