2002 (1) TMI 220 - AT - Central Excise

Tribunal denies exemption due to misrepresentation; justifies extended limitation period for duty recovery

DUGAR TETENAL INDIA LTD. Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR

The Tribunal held that the appellants were not entitled to exemption under Notification No. 175/86-C.E. due to misrepresentation of ownership of the brand ... Demand - Limitation - Extended period Issues:- Eligibility for exemption under Notification No. 175/86-C.E.- Mis-statement and suppression of facts with intent to evade payment of duty- Invocation of extended period of limitation under Section 11A(1) of the Central Excise Act, 1944- Bona fide belief of the appellants regarding entitlement to exemption- Ownership of the brand name 'TETENAL' and its impact on duty liability- Applicability of relevant case laws- Assessment of assessable value and duty deduction- Imposition of penalty under Rule 173Q of the Central Excise Rules, 1944Analysis:1. The appellants claimed exemption under Notification No. 175/86-C.E. for goods cleared under the brand name 'TETENAL.' The Central Excise department alleged mis-statement and suppression of facts to evade duty payment. The jurisdictional Commissioner invoked the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944, and imposed duty and penalty. The appeal challenged this decision.2. The show cause notice sought duty recovery for goods cleared during a specific period, alleging mis-declaration in classification lists. The adjudicating authority found intentional mis-statement by the appellants to avail exemption. It concluded that the extended limitation period applied, justifying duty recovery and penalty under Rule 173Q of the Central Excise Rules, 1944.3. The appellants argued a bona fide belief in their entitlement to exemption, citing relevant case laws. The department contended that the appellants knowingly misrepresented the ownership of the brand name to evade duty. The Tribunal considered these arguments in light of past decisions and the Supreme Court's rulings.4. The Tribunal found that the appellants were not entitled to the exemption due to the ownership of the brand name by a foreign collaborator. It concluded that the extended limitation period was rightly invoked based on intentional misrepresentation. The Tribunal distinguished the facts from cited case laws and rejected the plea of suppression of facts.5. The appellants also raised a plea regarding the assessable value deduction for duty calculation. The Tribunal directed the adjudicating authority to review this claim based on a relevant precedent. The imposed penalty was set aside due to lack of supporting findings against the appellants.6. In the final decision, the Tribunal held that the duty demand was not time-barred. However, it instructed a reassessment of the duty amount considering the appellants' claim for duty deduction. The penalty imposed was revoked. The appeal was disposed of accordingly.