TaxTMI 
TaxTMI 
2016 (4) TMI 603
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.... S. Muralidharan filed appeals against penalty(d) E/736/2007- Revenue filed appeal against Commissioner of Central Excise order. (e) The remaining appeals of assessees are filed against Commissioner of Central Excise (Appeals) order. I) Appeal E/700/2007, E/701/2007 & E/702/2007- Santel Communications Pvt. Ltd. 3. The brief facts of the case are that appellants M/s.Santel Communications Pvt. Ltd. are manufacturing excisable goods. Appellant was issued with SCN dt.4.10.2006 on the ground that appellants have not registered with Central Excise department and not paid appropriate central excise duty on the excisable goods manufactured i.e. Basic Wired Telephone Instruments bearing the brand name of "SANTEL" with M.R.P. Appellants also imported telephone instruments bearing the brand name of "GE" "AT&T" & "ACL" and "FP80" fax machines bearing the brand name of "PANASONIC" from Hongkong. These items are affixed with M.R.P and cleared the goods to domestic market. Appellants manufactured telephone instruments out of components imported from Hong Kong and cleared the same to M/s.Tata Teleservices Ltd. after affixing with brand name "TATA INDICOM" which is not the brand name of M/s.Sante....
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....t. 9.10.2006 was issued demanding an amount of Rs. 27,41,329/- under proviso to subsection (1) of Section 11A of the Central Excise Act and proposed penalty under section 11AC and also proposed for appropriating the amount of Rs. 2 lakhs already paid and also penalty on others. The Additional Commissioner in his order dt. 13.8.2007 confirmed the demand of Rs. 27,41,325/- and denied SSI benefit on the goods bearing others brand name of "TATA INDICOM" and "SANTEL" and appropriated Rs. 2 lakhs already paid and imposed equivalent penalty under Section 11AC of Rs. 27,02,772/- under Section 11AC and imposed penalty of Rs. 5 lakhs on Shri S. Ganesan, Director of the company and of Rs. 2,50,000/- on Shri S.Muralidharan, Financial Advisor. He dropped proceedings against Smt.Prema Jalpesan and A. Nagarajan, Director of Santel Communications. Appellants preferred appeals before Commissioner (Appeals). Commissioner (Appeals) in the impugned order dt. 31.8.2009 upheld the OIO and dismissed all the three appeals. Hence appellants filed the present appeals against the impugned order. III) Appeal No.E/627& 628/2009- Star Tech Telecom Pvt. Ltd. & other 5. The brief facts of the case are that M/s....
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.... Ltd., before selling the said goods through their dealers. He submits that Note 6 of Section XVI of Chapter 84 is not applicable as there is no manufacturing activity carried out and it is only a simple connecting parts using Screw Driver Technology. He submits that section 2 (f) was amended w.e.f. 1.2.2003 only. He referred to Notification No.36/2004 wherein appellants are not required to take registration when the goods are chargeable to "Nil" rate of duty. He relied on the following case laws :- (i) T.S.Cycles of India Vs UOI -1983 (12) ELT 681 (Mad.) (ii) Walchand Nagar Industries Vs CCE Pune -1995 (79) ELT 485 (T) (iii) CCE Chandigarh Vs Bhalla Enterprises-2004 (173) ELT 225 (SC) (iv) Commissioner Vs Mahaan Dairies -2004 (166) ELT 23 (SC) (v) Commissioner Vs Rukmani Pakkwell Traders-2004 (165) ELT 481 (SC) (vi) Indian Xerographic System Ltd. Vs CC Bombay-1995 (80) ELT 337 (T) (vii) CC Vs Hindustan Motors Ltd.-2003 (156) ELT 55 (Tri.-Del.) 8. On limitation, he submits that the demand is hit by limitation as they have submitted all the facts before the Commissioner. They have maintained all the records against which the Commissioner ....
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....ustries first started manufacturing the goods which has no registration with brand name of anybody. Trade Mark authority has already rejected the application of Santel Industries. He relied on the following case laws :- (1) Garnier Solutions Vs CCE Bangalore-2008 (232) ELT 311 (Tri.-Bang.) (2) CCE Chandigarh Vs Bhalla Enterprises-2004 (173) ELT225 (SC) (3) CCE Kolkata Vs Nitin Electronics Corpn.-2003 (160) ELT 605 (Tri.-Kolkata) (4) Leo Rubbers Vs CCE Hyderaba-2006 (203) ELT 49 (Tri.-Bang.) 11. On penalty, he submitted that Director of the company and other co-noticees are not liable for penalty. He further submits that since the Commissioner of Central Excise allowed SSI benefit in the case of Santel Communications and held "TATA INDICOM" and "Santel" is not a registered brand name of anybody. Therefore, they are well within the SSI limit in respect of other assessee-appeals. He submits that all the demands are hit by limitation. 12. The Ld.A.R reiterated the adjudication order passed by Commissioner and the grounds of appeal in the Revenue appeal. On limitation, he submits that appellants are not registered with Central Excise. He drew our attent....
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....held OIO. 13. In rejoinder, learned advocate countered the arguments of A.R both on limitation as well as on merits. He further submits that Department relying on the case of CCE Bhopal Vs Quantum Instruments & Electronics (supra) is in favour of assessee. He referred to para-21 of the said Tribunals decision. He further submits that there are conflicting decisions and various Boards circulars which are in favour of the appellant. He submits that suppression cannot be invoked in this case. The decision relied by Revenue in the case of CCE Vs. Mehta & Co. (supra) is not applicable and there is no intention to evade duty. He relied on the SCN which proposed only for demand after allowing SSI exemption. He submits that M/s.TATA INDICOM is not manufacturer of excisable goods or they have any branded goods. They are only service provider and not manufacture of any branded goods i.e. telephone and have not sold any branded goods to anybody where telephone instruments are used for others. Therefore, the Commissioner in his adjudication order has correctly allowed the benefit. He submits that Board's circular is binding on the department. The circular was withdrawn after Supreme Court j....
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....that, on merits, the process carried out by them would not amount to "manufacture" as the entire parts and instruments were imported in CKD condition and they have only assembled the parts. It was also contended that they were not required to take any central excise registration as they are well within the SSI limit, that merely affixing of M.R.P sticker is not amounting to "manufacture". On the issue whether process carried out by assessees, amounted to "manufacture", we find that the adjudicating authority has discussed the issue in his findings at para 7 to 13. He dropped the demand in respect of imports of fully assembled basic wire telephone instruments which were marked in the brand name of "SANTEL" for the period prior to 1.3.2003 as the amendment to Section 2(f) (iii) came into effect only from 1.3.2003. The adjudicating authority discussed the amended section 2 (f)(iii) effective from 1.3.2003 vis-a-vis the processes carried out by them. We reproduce section 2 (f) (iii) as it stood at the material period as under :- Manufacture includes any process which, in relation to the good specified in the Third Schedule, involves packing or re-packing of such goods in a unit cont....
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....g authority demanded excise duty and allowed SSI exemption benefit cum duty benefit and the cenvat credit on the inputs. 20. On the limitation, the appellant's contention is that the extended period is not invocable as no clear charge was brought out in the SCN and there is no allegation of conscious and deliberate intention to evade payment of duty. We find that the appellants are not registered with Central Excise for manufacture and clearance of excisable goods and not filed any declaration before the department claiming SSI exemption. It is pertinent to see that Notification No.36/2001-CE (NT) dt. 26.6.2001 exempts from Rule 9 of CER under certain conditions. Para 1 (i) (a) of the said notification stipulates that every manufacturer makes a declaration claiming the exemption from registration before the authorities. We find that even after crossing the SSI value limit, the appellants failed to obtain Central Excise Registration, nor followed any of the procedure prescribed under the Central Excise Act. But for the investigation by the department, this fact could not have come to notice and this is corroborated with various statements recorded from Shri N. Sairam, Productio....
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....ods "telephones" bearing the brand name of TATA INDICOM pertaining to the period 2002-03 to 2004-05. The revenue's main ground is that the impugned goods were cleared under the brand name of other person as per para (4) of the notification SSI benefit is not eligible on the said goods. The other major ground of the Revenue is that the adjudicating authority ought to have followed the decision of Apex Court in the case of M/s.Kohinoor Elastics Pvt. Ltd. (Supra) and should not have allowed the Rs. 1.0 Crore exemption limit. 24. On perusal of records and findings, we find that the adjudicating authority dealt the issue in detail at para 14 of the order and relied the Boards Circular dated 27.10.2014 and the Apex Court's decision in the case of Collector Vs Vimal Printery [Civil Appeal No.D.No.8814/99] reported in 1999 (115) ELT A 222 (SC). It is seen that the assessee supplied the Basic wired telephones to the "TATA INDICOM" who isonly a Telecom service provider and not engaged in manufacture of any excisable goods with Brand name and not registered under Central Excise. The telephone sets supplied by the appellant are not traded or sold to customers but are only rented to the cu....
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.... order. 27. In view of the above facts, we hold that the Telephones cleared by the appellants bearing the name of "TATA INDICOM" to the telephone service provider does not amount to usage of other's Brand to attract para-4 of SSI notification and we do not find any infirmity in the impugned order to the extent of allowing SSI exemption benefit to the goods cleared bearing the name of "TATA INDICOM". The revenue appeal is liable to be rejected. Appeal Nos.E/624, 625, 626/ 2009: 28. The appellant M/s.Santel Industries filed the appeals against Commissioner (Appeals) order and the facts are identical to the appeal of Santel Communications discussed above. The adjudicating authority held the activity carried out by the appellants of assembling telephones amounts to manufacture in terms of Sec.2 (f) (iii). He denied SSI exemption benefit to the goods bearing the name of "TATA INDICOM", "Santel" and confirmed demand and penalty. We have already held in appeals of Santel Communications in the preceding paragraphs that the process amount to manufacture and the goods are excisable after allowing the SSI benefit, the same holds good in these appeals. 29. As regards the denial of SSI ....
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....e to satisfy the assessing authorities that there was no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, it would be entitled to the benefit of exemption. An assessee would also be entitled to the benefit of the exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name. 7. The decision in Rukhmani Pakkwell Traders (supra) and Mahaan Dairies (supra) set aside the decision of the Tribunal holding to the contrary in the matter of Fine Industries reported in 2002 (146) E.L.T. 53. In the appeals which are being disposed of by us the decision in Fine Industries has been followed by the Tribunal and relief has been granted to the assessee's concerned without going into any other question. The learned Counsel for the different assessees have pointed out to us that in many of the appeals which are being disposed of today, there were other issues raised by them relating to limitation and ownership which would need a determination by the Tribunal. The orders in all these appeals are therefore being passed separately. C.A. No. 538....