TaxTMI 
TaxTMI 
2010 (9) TMI 497
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....rose out of O-I-O No. 04/2007 dated 14-2-2007 and Appeal No. 42/2007 arose out of O-I-O No. 6/2007, dated 29-3-2007. 2. In Appeal No. 32/2007, before learned Commissioner (Appeals), held as under :- (1) The markings on the plastic chairs manufactured by the Appellant Assessee were brands within in the meaning assigned to the term 'brand name' or 'trade name' in the context of the Notification No. 8/2003. The brands and the moulds used to affix the brand name belonged to Shri Rahamatullah and that person not being eligible to avail benefit the exemption Notification No. 8/2003, the Appellant was also not entitled to the same. (2) The goods manufactured by the Appellant using brand name of another person was under an authorisation given by the owner of the brand name and consideration was paid to the original brand name owner for such purpose. Such material fact having been suppressed and undue benefit having been claimed by the Appellant under above Notification, larger period of limitation was invokable and matter became adjudicable without being time-barred. (3) The amount paid prior to the issue of show cause notice shall be excluded from duty liability for imp....
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....abad. That person was also manufacturing plastic moulded chairs with the same brand name at M/s. Lalitha Plastics, Cherlapally, Hyderabad. Investigating team seized the available stock of branded plastic moulded chairs totally valued at Rs. 3,19,200/- in terms of Panchnama dated 14-10-2005 on the belief that the said goods were manufactured in contravention of the provisions of the Central Excise Act, 1944 and Rules made there under and liable to confiscation. 7. Search team also recovered certain records from the residence of Shri Rahmatullah who was brand owner of "Rosekamal", "Lalkamal", "National" etc. During search at the shop of M/s. Jai Bhavani Agencies, Khaja Estate, Feel Khana, Hyderabad the Investigating team also found 156 plastic moulded chairs bearing the brand name 'Lalkamal and Ceilo' and seized the same valued at Rs. 10,920/- finding no bill/invoice. They reasonably believed that such goods were cleared in contravention of the provisions of the Central Excise Act and were liable to confiscation. Records from the residence of Shri Pavan Kumar Soni, who used to look after the affairs of the Appellant, were also recovered demonstrating appellant's connection with....
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.... An amount of Rs. 46,30,026/- towards CENVAT and Rs. 75,722/- towards Education Cess (totalling to Rs. 47,05,798/-) should not be paid by the Appellant under Section 11A(1) of the Central Excise Act, 1944 read with proviso thereto towards the Central Excise duties not paid by it on the clearances of branded plastic moulded chairs effected clandestinely; (iii) The amount of Rs. 10 lakhs voluntarily deposited by the Appellant through TR-6 challan should not be appropriated towards the duty liability against above clandestine clearances made without payment of duty; (iv) Penalty of an amount equal to the duty amount mentioned at Sl. No. (ii) above should not be deposited by them under Section 11AC of the Central Excise Act, 1944; (v) Penalty under Rule 25 of Central Excise Rules, 2202 should not be imposed on them for the contraventions alleged supra; and (vi) Interest on the amounts of duty demanded as at Sl. No. (ii) above should not be payable by the Appellant by them in terms of Section 11AB of Central Excise Act, 1944 read with the relevant notification. 11. Hearing the Appellants and upon exa....
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.... of Rs. 33,06,722/- (Rupees Thirty three lakhs six thousand seven hundred and twenty two only) was recoverable towards CENVAT and Rs. 49,230/- (Rupees Forty nine thousand two hundred and thirty only) towards education Cess (totalling to Rs. 33,55,952/-) under Section 11A(2) of the Central Excise Act, 1944. (4) An amount of Rs. 10,00,000/- deposited by M/s. Annapurna Industries in the course of investigation was liable to be appropriated and adjustable towards the duty confirmed. Cenvat credit of Rs. 1,43,716/- and Education Cess of Rs. 1,154/- were allowed and adjusted towards the duty confirmed at Sl. No. (3) above. (5) Penalty equal to the amount mentioned at Sl. No. (3) above under Section 11AC of the Central Excise Act, 1944 was imposed; (6) In view of the mandatory penalty imposed under Section 11AC of the Central Excise Act, 1944, no penalty under Rule 25 of Central Excise Rules, 2002 was imposed; (7) Interest on the amount of duty demanded as at Sl. No. (3) above at appropriate rate became payable till the actual date of payment under Section 11AB of Central Excise Act, 1944 r....
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....i Rahamatullah, the appellant was not deniable to SSI exemption benefit. Sri Rahamatullah was not the owner of brands. Therefore Board Circular No. 52/52/94-CX., dated 1-9-1994 is interpretable in favour of the appellant. There was no clandestine removal made by the appellant. She further submitted that the adjudication proceeding was time-barred since Show Cause Notice was issued in this case on 26-5-2006 and there was no .suppression of fact at all. There was no liability to duty or penalty at all in view of SSI exemption permissible to the appellant. The appellant was under bona fide belief that it was neither liable to duty on the goods manufactured by it nor there shall be any registration required under law for SSI benefit to it. So also it was under honest belief that SSI exemption benefit was available to it as owner of brand name in terms of the Notification aforesaid for which no duty liability arose. There was no deliberate intention to cause prejudice to Revenue. Accordingly the Show Cause Notice is ill founded and Penalty was not at all imposable. 15. Learned SDR Ms. Sudha Koka appearing on behalf the Revenue, argued that investigation unearthed modus operandi of....
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..../- per chair to Sri Rahamatullah. Materials borne by record thus became decisive in absence of any agreement produced to the contrary. 18. Materials gathered and evidence recorded from different persons as stated in para 6, 7 & 8 of the order of Adjudication shows that the appellant had manufactured and cleared plastic moulded chairs exclusively bearing the brands "Lalkamal", "Rosekaml", "Ceilo" and "National" from June 2003 onwards. It had also manufactured PP Mats without any brand during the period. The moulded chairs manufactured with the brand names 'Lal kamal, Rose kamal, Ceilo and National' belonged to Shri S. Rahamatullah, Proprietor of M/s. Rose kamal Moulded Furniture of Bangalore in terms of his oral evidence. Such fact was also confirmed from the inventory taken during search and seizure in terms of Panchnama dated 6-10-2005 and 14-10-2005 demonstrating that the goods were affixed with brand name. 19. Oral evidence as evaluated and appreciated by learned Adjudicating Authority in Para 50 and 51 of the order of adjudication proved that the appellant manufactured its goods using brand names from June 2003 onwards and there was nothing on record to contradict s....
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....ing amount was considered by learned Adjudicating Authority as the value of clearances of branded chairs without sales bills/invoices during the period. Such fact remained undisputed all along. 22. Appellant had also procured reprocessed granules without bills to enable it to manufacture goods and clear the same without sales bills/invoices, as proved from records recovered from the residences of Shri Rahamatullah. No rebuttible evidence could be led by the Appellant to prove its claim of no use of brand name nor could it prove that the brand name belonged to it. While nexus of brand to the goods was established and oral evidence of Sri Rahamatullah crippled the claim of the appellant, the appellant made it ineligible to the SSI exemption benefit. Also no credible evidence could be led by the appellant to prove clearances of goods made were in accordance with law and SSI exemption benefit was permissible. The appellant made undue gain at the cost of Revenue seeking no registration under the Act, and the appellant suppressing material facts before the Central Excise Authority, made it liable to adjudication u/s 11A of the Act. The adjudication proceeding was nothing time-barre....