2000 (9) TMI 698

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....re not eligible for the benefit of small scale exemption provided by the said Notification dated 1-3-1986 (as amended), and that they had deliberately concealed the fact of manufacturing branded goods to avail the benefit of payment of concessional rate of central excise duty. Duty of Rs. 47,82,181/- was demanded for the period July, 1988 to March, 1991 invoking the extended period of limitation. Penal provisions were also invoked. 2. The matter was adjudicated by the Commissioner of Central Excise, Delhi-II, who under his order-in-original dated 27-11-1997 framed the following three issues for his consideration :- (1)     The Department has alleged that the party manufactured two categories of lights - one those made of glass and the second, lights other than those made of glass. They however, irregularly claimed exemption under Notification No. 96/86-C.E., dated 10-2-1986 and Notification No. 80/90-C.E., dated 20-2-1990 in respect of the lamps/lights made of glass which they cleared in the guise of lamps/lights other than made of glass. (2)     the party was alleged to have found affixing the brand name of 'lovelites' on the l....

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....November, 1990 to December, 1990 valued Rs. 9,81,274/- involving Central Excise duty of Rs. 1,54,551/-, were also found established against the appellants. Total duty of Rs. 19,46,981/- was confirmed and a penalty of Rs. 20,00,000/- was imposed. 3. The matter was heard on 8-9-2000 when Shri J.P. Kaushik, Advocate made the following submissions :- (i)      No brand name was affixed on the goods in question. The brand name was only mentioned on the tags attached to the packages containing the said goods. It was only from March, 1991 (after the period in dispute) that the brand name was used on few varieties of the goods. Prior to that only tags were used on the packing boxes and not on the goods. Such mentioning of the name on the tags will not be hit by the relevant provisions of the Small Scale Exemption Scheme. He relied upon the Tribunal's decision in the case of Srinisan Cables (Pvt.) Ltd. v. Commissioner of Central Excise, Hyderabad - 1999 (32) RLT 418 (CEGAT) wherein it was held that when the customer's name was written on a tag attached to the goods, and no brand name was affixed on the goods, the benefit of Notification No. 175/86-C.....

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....   The unit was holding Central Excise licence and was a duty paying unit. They were availing the benefit of Modvat credit. (v)     The whole of the demand was hit by time bar. The demand was for the period July, 1988 to March, 1991, and the show cause notice was issued on 28-7-1993. He referred to the earlier show cause notice dated 3-9-1991 wherein similar allegations had been made and the said show cause notice had been withdrawn by the adjudicating authority. It was also submitted that when the demand was not sustainable, being time barred, no penalty could be imposed. He referred to the Tribunal's decision in the case of National Organic Chemical Industries Ltd. v. CCE, Mumbai - 2000 (38) RLT 862 (CEGAT). (vi)    The allegations of suppression of production and clandestine removal has been made only on the basis of differences in value. It is not because of any difference in quantity. The appellants have duly explained the position and he referred to the reply at page 18 (Annexure B) of the paperbook. (vii) In-valuation, installation charges had also been included and no adjustment of duty had been provided. In repl....

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....ted 21-8-1991 had stated that the lamps and lights manufactured by M/s. Kapoor were affixed with a printed tag indicating the name of the manufacturer as M/s. Kapoor Lamp Shade Company (R), and the back of this tag contained the word 'lovelites' with its symbol printed below it. In paras 10 and 11 of the show cause notice dated 3-9-1991 results of the investigations made were summarised. In para 12 it was alleged as under :- "Thus, M/s. Kapoor Lamp Shade Company (MU), Faridabad have made a wrong declaration on the classification list filed with the department that they are using their own brand name "Kapoor Lamp Shade" on packing boxes as they were found affixing the said goods with the brand name of "lovelites". The noticees had replied to this show cause notice on 24-12-1991 in which, among other grounds, they stated that there was no mis-declaration and further made a reference to their earlier reply dated 5-8-1991 to the previous show cause notice 31-5-1991 issued by the Asstt. Collector of Central Excise, on the same subject. This earlier show cause notice dated 3-9-1991 was adjudicated by the Addl. Collector of Central Excise, Faridabad under his order-in-original da....