TaxTMI 
TaxTMI 
2019 (1) TMI 817
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.... Revenue 0 0 2.1 The appeal at Sl No 1, is directed against the order of Commissioner (Appeals), upholding the demand of duty as indicated on the ground that the Relays cleared by them were to be assessed in terms of Section 4A of The Central Excise Act, 1944 and not under Section 4. Penalty and demand of interest has also been upheld. 2.2 The Appeal at Sl No 2 & 3 is directed against the order of Commissioner. By the said order demand of duty has been made by invoking the extended period of limitation as provided by proviso to Section 11A (1). Demand has been made on the ground that appellants have been using the brand name 'PLA Relays' which was not owned by them and not registered in their name. Demand was has been confirmed holding that the Relays cleared by them are liable for assessment under Section 4A and not under Section 4. Penalty has also been imposed on the partner who is also in appeal. 2.3 Appeal at Sl No 4 & 5 are directed against order of Commissioner (Appeal). Appeal at Sl No 4 is filed by the appellants (assessee) and the one at Sl No 5 is filed by revenue. Appeal of party is directed against the order of Commissioner (Appeal), upholding the dem....
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....of Relay should confirm to the Rule 6, 17 & 29 of SWMR. 3.7 Appellants sold the relays to M/s Planet Electronics Pvt Ltd, who in turn sold them in retail through their network of dealers. The sub dealers sold the relays either in retail from their shops or to the retailers in the market. 3.8 In their statement recorded under Section 14, M/s Planet Electronics, to bring on record the manner of marketing network, it was admitted that the goods were sold through the network of dealers in retail. 3.9 On the basis of then investigations proceedings were initiated against the appellants by issuance of Show Cause Notice dated 04.04.2007. Subsequently two more show cause notices dated 14.01.2008, & 01.04.2008 have been issued to the appellants. 3.10 Appellants contested all the three show cause notice. The Notice dated 04.04.2007 was adjudicated by the Commissioner and the other two were adjudicated by the officers below in rank to the Commissioner. Accordingly first appeal against these order went to Commissioner (Appeal). 3.11 Aggrieved by the orders of Commissioner and Commissioner (Appeal) appellants are now in appeal before us. 4.1 We have heard Shri Nivan Mainker Le....
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....on 11A(1) of the Central Excise Act, 1944. Hence even if the matter is decided against them on merits it needs to be remanded back to adjudicating authority to consider the applicability of extended period of limitation. 4.2 Arguing for the revenue learned Authorized representative submitted i. Appellant cleared the goods in retail market by mentioning on the package "INDUSTRIAL PRODUCT EXCLUSIVE USE OF INDUSTRIES AS INTERMEDIATE / FOR SERVICING INDUSTRIES NOT INTENDED TO BE DISPLAYED FOR SALE AT RETAIL OUTLET". These goods were actually sold by number in the retail market through dealer network. ii. Appellants were using the brand "PLA Relays" on the goods cleared by them during the period September 2002 to September 2007. The words "RELAYS" used on the label was to create a subterfuge in order to fraudulently claim the benefit of the said concessional rate under notifications. The brand "PLA" was also used by M/s PLA Components and they were paying duty at full rate. iii. Registrar of Patents and Trade Marks have vide their letter TMR/ Central Excise/05/07-08 dated 13,09.2007 informed that "PLA is applied and registered in the name of M/s PLA Electro Appliances Pvt Lt....
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....ect of manner of assessment of "Relays" sold in the manner as have been cleared by the Appellants is no longer res-integra. Tribunal has in case of Schneider Electrical India (P) Ltd vs Commissioner Central Excise Nashik [2014 (311) ELT 113 (T-Mum) held as follows: "15. Issue No. A: The said issue came up before the Hon'ble High Court of Bombay in the case of Larsen & Toubro Ltd. (supra) as that whether the valuation of E/1143/2009,90,91/2010,89384,89746/12 2013 goods for the levy of excise duty, whether the provisions of Section 4 or 4A of the Central Excise Act, 1944 are applicable. 16. The contention of the appellant is that as per the explanation to Rule 2A of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 that as the package commodities are meant for industrial or institutional consumers therefore they are not liable to affix MRP on their products accordingly they are out of the purview of Section 4A in that case. But the Hon'ble High Court of Bombay has held that appellants are required to affix MRP on the impugned goods. Further, the contention of the appellant is that the decision of Hon'ble High Court in the case of Larsen & Toubro Ltd. (supra) ....
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....the Higher Court. The judgment being stayed does not wipe it out unless and until it is so wiped out, it continues to be binding on the lower and subordinate Courts." The said decisions were not brought in the knowledge of this Tribunal. Therefore, the judgment of this Tribunal in the case of Tex Age (supra) will not cease to be binding precedent". As the decision of the Hon'ble High Court of Bombay in the case of Larsen & Toubro Ltd. (supra) has not been set aside by the Hon'ble Apex Court. Therefore in the light of the judgment in the case of Shri Chamundi Mopeds Ltd. the judgment of the Hon'ble High Court of Bombay in the case of Larsen & Toubro Ltd. (supra) is a law of land as on today. Therefore, we hold that the appellants are required to affix MRP on the impugned goods." In view of the above decision we are of the view that assessment of the goods manufactured and cleared by the appellants is required to be done in terms of Section 4A of the Central Excise Act, 1944. 5.3 It is an admitted fact the appellants were using the brand name on their goods which did not belonged to them but was owned by someone else. Commissioner has in his order recorded as follows: ....
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....ods as an input for the goods manufactured by him. Yet clause 4 provides in categoric terms that the exemption is lost if the goods bear the brand/trade name of another. Clause 4 does not state that the exemption is lost only in respect of such goods as reach the market. It does not carve out an exception for goods manufactured for captive consumption. The framers meant what they provided. The exemption was to be available only to goods which did not bear a brand/trade name of another. The reason for this is obvious. If use of brand/trade names were to be permitted on goods manufactured as per the orders of customers or which are to be captively consumed then manufacturers, who are otherwise not entitled to exemption, would get their goods or some inputs manufactured on job-work basis or through some small party, freely use their brand/trade name on the goods and avail of the exemption. It is to foreclose such a thing that clause 4 provides, in unambiguous terms, that the exemption is lost if the "goods" bear a brand/trade name of another." Hon'ble Supreme Court has in case of Parle Bisleri Ltd [2011 (263) ELT 15 (SC)] held as follows: "14. The second issue concerns the quest....
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...., researched and concocted by M/s. PEL Ltd. in its research labs. That M/s. PEL Ltd. have given the brand names to the flavours and allowed them to be manufactured by the appellant, their holding company cannot hide the fact that M/s. PEL Ltd. were in fact, the owner of the code/brand names. This conclusion is fortified by the fact that it was M/s. PEL Ltd. who transferred the right of the codes when they were sold to M/s. Coca Cola Company in November, 1993. Since the appellant was not the owner of the said brand names in question, the Tribunal was justified in holding that the appellant will not be entitled to the benefit of Notification No. 175/86 and 1/93 for the products with code names G-44T, L-33A, TIIPC, T-IIP, R-66M and K-55T which belonged to M/s. PEL Ltd." In Grasim Industries Ltd [2005 (183) ELT 123 (SC)], Hon'ble Apex Court held "15...... In our view, the Tribunal has completely misdirected itself. The term "brand name or trade name" is qualified by the words "that is to say". Thus, even though under normal circumstances a brand name or a trade name may have the meaning as suggested by the Tribunal, for the purposes of such a Notification the terms "brand name or....
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....d name "TATA" did not belong to the assessee. It is also evident that by using the said brand name, the assessee had not only intended to indicate a connection between the goods manufactured by them and Tata Company; but also the quality of their product as that of a product of Tata Company, as they were supplying their goods to the said company. Thus, the bar created in Clause 4 read with Explanation IX of the Notification is clearly attracted in the present case, disentitling the assessee from the benefit of the exemption notifications under consideration. We are of the opinion that the decision of the Tribunal is clearly erroneous and deserves to be set aside." Thus in view of the facts as determined by the Commisssioner in his order and the decisions of the Apex Court referred above we are of the view that the benefit of exemption under Notification No 9/2002-CE dated 1/3/2002 and 8/2003-CE dated 1/3/2003 has been correctly denied to the appellants. 5.4 On the issue of cross examination Commissioner has in his order para 76, recorded as follows: "76 The assessee has asked for the cross examination of five of the sub-dealers of M/s PLA Electronics as also of panchas in ....
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....n the invocation of extended period as provided by the proviso to Section 11A(1) of the Central Excise Act, 1944. Commissioner (Appeal) has set aside the order of adjudicating authority, without rendering any finding on the issue of limitation. Since issue of limitation has not been adjudged by either the adjudicating authority or Commissioner (Appeal), the matter needs to be remanded back to the adjudicating authority for consideration of the issue on limitation. 5.6 Appeal No E/89476/13 has been filed by the revenue against the Order in Appeal No SK/269/M II/2013-14 dtd 14.10.13 for the reason that Commissioner (Appeal) has while setting aside the order of adjudicating authority not imposed any penalty under section 11AC of the Central Excise Act, 1944. Since the penalty under Section 11AC is directly linked to the decision on invocation of extended period of limitation, as has been held by the Apex Court in case of Rajasthan Spinning Mill [2009 (238) E.L.T. 3 (S.C.)] "16. The other provision with which we are concerned in this case is Section 11AC relating to penalty. It is as follows : 11AC. Penalty for short-levy or non-levy of duty in certain cases.- where any duty o....
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....against the total amount due from such person.] 17. The main body of Section 11AC lays down the conditions and circumstances that would attract penalty and the various provisos enumerate the conditions, subject to which and the extent to which the penalty may be reduced. 18. One cannot fail to notice that both the proviso to sub-section 1 of Section 11A and Section 11AC use the same expressions : "....by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,...". In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped dut....
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....ty in such cases was duty bound to impose penalty equal to the duties so determined. The assessee on the other hand referred to Section 271(1)(c) of the Income Tax Act, 1961 (in short the IT Act') taking the stand that Section 11AC of the Act is identically worded and in a given case it was open to the assessing officer not to impose any penalty. The Division Bench made reference to Rule 96ZQ and Rule 96ZO of the Central Excise Rules, 1944 (in short the "Rules') and a decision of this Court in Chairman, SEBI v. Shriram Mutual Fund & Anr. [2006 (5) SCC 361] and was of the view that the basic scheme for imposition of penalty under section 271(1)(c) of IT Act, Section 11AC of the Act and Rule 96ZQ(5) of the Rules is common. According to the Division Bench the correct position in law was laid down in Chairman, SEBI's case (supra) and not in Dilip Shroff's case (supra). Therefore, the matter was referred to a larger Bench." After referring to a number of decisions on interpretation and construction of statutory provisions, in paragraphs 26 and 27 of the decision, the court observed and held as follows : "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It ha....