AI Drafter 
TaxTMI 
TaxTMI 
2024 (8) TMI 991
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....20 working sheds in the factory and both sons divided these sheds and took control of 10 sheds each and carried out manufacturing of fireworks independently. Thus, after the death of Shri. Vadivel in 1993, the sons did not continue with the partnership and manufactured fireworks independently in the sheds. Shri. Arumugasamy manufactured fireworks in the name of Vadivel Fireworks using the brand name "Bison" and Shri. Selvaraj used the brand name "Parrot". Each of them obtained separate sales tax registration as their clearances were separate. Shri. Arumugasawmy filed the required declaration with the central excise department as an SSI unit. Shri. Selvaraj did not make any such declaration. 4. The manufacture of fireworks requires arms and explosives licence. Though the earlier unit Premier Fireworks had the licence, could not renew due to the death of Shri. Vadivel in 1993. The licence in the name of Shri. Vadivel Fireworks (which was earlier partnership firm) was later shared by both units for purchase of raw materials for manufacture of fireworks. It is mandatory to declare the details of licence on the goods manufactured. Since the raw materials were purchased under the lice....
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....eady, he has been selling the fireworks manufactured in the brand name "Parrot" which was earlier used by Premier Fireworks. In the cartons of fireworks manufactured by Shri. V. Selvaraj, the name 'Premier Fireworks' and the picture of parrot with letters denoting 'Parrot' are printed. At the bottom it is printed that the product is of M/s. Vadivel Fireworks. The sales of above product are accounted in the sales tax registration in the name of M/s. Premier Fireworks. Shri. V. Arumugasamy has been manufacturing and selling fireworks in the brand name "Bison" under a sales tax registration taken out in his name. It was submitted that they have been carrying out manufacture independently without any business relation between them. 8. From the above, it appeared to the department that Shri. V. Arumugasamy and Shri. V. Selvaraj are independent manufacturers who carried out manufacturing activity from a single factory i.e. original M/s. Vadivel Fireworks. Though each of them holds independent sale tax registration certificate it is clear from the facts that all manufacturing activities carried out in original Vadivel Fireworks (original Vadivel Fireworks referred to in show cause noti....
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.... 581910 634860 123417 503416 1843603 5000000 0 0 TOTAL 5828 (ii) M/s Vadivel Fireworks shall also be liable to pay interest at appropriate rates under Section 11AB of the Central Excise Act, 1944; (iii) I impose a penalty of Rs.5,828.00 (Rupees Five thousand eight hundred and twenty eight only) on M/s Vadivel Fireworks under Section 11AC of the Central Excise Act, 1944. The penal proceedings initiated under rule 173Q are hereby dropped; and (iv) M/s Vadivel Fireworks may exercise the option for payment of penalty imposed under Section 11AC subject to fulfilment of the conditions stipulated therein. 13. Subsequently, vide Order-in-Original No.21/2002 dated 26.03.2002, the original authority adjudicated the two show cause notices dated 16.02.2000 and 18.02.2000 and dropped the entire proceedings as per these show cause notices. It was held in para 15 of the said order-in-original dated 13.03.2002 that the demand of Rs.5,828/- has been confirmed and that all proceedings initiated by these show cause notices are liable to be dropped in toto. The findings of the origina....
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....me was in public domain and anyone was free to use it. In these circumstances, I hold that the use of the brand name 'Parrot' does not disentitle VFW the benefit of SSI exemption in respect of fireworks removed with the brand name 'Parrot". In consequence, I have to hold the seizure of fireworks bearing the brand name 'Parrot' merits, unconditional release. However, they have to be accounted in the records and cleared on payment of appropriate duty 18. The above situation warrants unconditional release of the fireworks seized and proposed to be confiscated and since the value of clearances in respect of both the brands when added to the value determined by me in the Order in Original No 20/2002, does not exceed the SSI exemption limits, the demand of duty of Rs.1,44,999/- is held to be not justifiable. In consequence, the penal proceedings are also liable to be dropped in toto. 19. In view of the above findings. I pass the following order ORDER 20. I hereby drop all the proceedings initiated in the SCN issued in O C No.156/2000 dated 18-02-2000 by the Superintendent of Central Excise, Range III, Sivakasi and the proceedings in....
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....epartment appeal. The Tribunal had remanded the appeal vide Final Order dated 05.06.2012 as there was no representation on behalf of the appellant to bring out the correct facts before the Tribunal. Consequent to the earlier remand, the Tribunal remanded the other appeal also. 18.1 The case of the department as alleged in show cause notices after the investigations is as under: Certain enquiries and verification of records by the Department showed that (i) The two partners functioned independently in a single factory and manufactured and sold fire works with different brand names and different Sales Tax Registration Certificates. (ii) After the death of Shri. Vadivel, father of the said two partners, the "Parrot" brand originally owned by Late Shri. Vadivel had not been properly assigned to or inherited by the said two partners and the said brand name was found to have been used by the appellant in contravention to Notification No.01/93, which states that the SSI exemption benefit will not be available if the manufacturer uses the brand name of another. (iii) Both the partners were found to have manufactured fireworks without proper accounting and 711 invoices showin....
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....aid the said duty with interest and equal penalty of Rs. 5,828/-. 18.3 In regard to the show cause notice dated 08.02.2001 (for Rs.14,45,371/-) the original authority in Order-in-Original dated 13.03.2002 had held as under: - (i) As the impugned goods were manufactured in the same factory premises using common Explosives License, their value of clearances of both sons are required to be clubbed together. (ii) The investigation had failed to prove the genuineness/authenticity of the said 711 invoices by recording statement from Shri. Prasad who had prepared such invoices. The said invoices also did not contain information like vehicle number, carrier name to believe their authenticity. Customers also accepted only certain transactions covered by such invoices. (iii) The investigation had proved the removal of fireworks only to the extent admitted by the buyers. (iv) No proper investigation conducted with reference to procurement of raw materials for justifying manufacture of such a huge qty of fireworks as alleged in the SCN. Moreover, no evidence placed on record showing receipt of sale proceeds and the manner of its accounting for the purpose of substantiating the c....
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....ing to department, the partnership firm founded by the father with two sons as partners (Vadivel Fireworks) still remains and continues to exist. It is argued that since the father who was one of the partners died in 1993, the said partnership has ceased to exist. Section 42(c ) of Partnership Act, 1932 states that a partnership dissolves on the death of a partner. The demand having been raised against a firm which is no longer in existence cannot sustain. 18.5.1 It is stressfully argued by the Ld. Counsel for appellant that the appeal filed by the department before the Commissioner (Appeals) as well as before the Tribunal in the first round of litigation is that the duty demand raised on the basis of 711 invoices ought to be confirmed as these invoices are sufficient evidence for clandestine removal of goods. The view taken by the adjudicating authority that the trade mark 'Parrot' is not proved to be owned/registered by another and the denial of SSI exemption benefit on this ground was not challenged by department before Commissioner (Appeals) or Tribunal and therefore this issue has attained finality. 18.6 In regard to the allegation of clandestine removal on the basis of ....
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.... buyers of fireworks. 19.2 These evidences established that appellant was manufacturing fireworks in the Brand name 'Bison' and 'Parrot' and clearing these goods under the name of appellant as well as under the name of M/s. Premier Fireworks which was defunct. The assessed has not given any explanation about 711 invoices. Though they contend that these are signed by Prasad and have not been proved as he was not examined, the appellant has not explained the sales made as per these invoices. The assessee has not maintained correct account. 19.3 Para 13 of the impugned order was referred by the Ld. AR to argue that these invoices are corroborated by statements of some buyers. The department has been able to establish that the appellants have clandestinely manufactured and cleared goods over and above the SSI exemption limit of Notification No.01/93 as amended and therefore not eligible for exemption. It is prayed that the appeals may be dismissed. 20. Heard both sides. 21. The totality of allegations raised in the three show cause notices are that:- (i) The appellant has clandestinely manufactured and cleared fireworks over and above the SSI exemption applicable d....
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...., Sivakasi and Shri. V. Arumugasamy, S/o Shri. Vadivelu, 41, Kaliammankoil Street, Sivakasi are engaged in the manufacture of fireworks falling under, subheading 3604 of Central Excise Tariff Act at M/s. Vadevel Fireworks, Parapatti Village, Sattur Road, Sivakasi (hereinafter shall be referred to as "original Vadivel Fireworks") in their capacity as partners. There are 20 working shed in the factory premises of M/s. Vadivel Fireworks. Both the partners have divided them into ten each and have been manufacturing fireworks independently in their respective sheds as if two independent units were functioning. Shri. V. Arumugasamy has been manufacturing and selling fireworks in the brand name "Bison" and trading them with independent sales tax Registration Certificate held in the name of M/s. Vadivel Fireworks. Shri. V. Selvaraj has been manufacturing fireworks in the sheds belonging to him in the brand name "Parrot". He has been selling them under the independent Sales Tax Registration Certificate held in the name of M/s. Premier Fireworks. xxxxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxxxx Whereas it appears from the foregoing that Shri. V. Selvaraj and V. Arumugasamy remain as par....
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....works separately. The clearances of each manufacturer is eligible for SSI exemption. These aspects have not been examined at all. By clubbing the clearances of both premises (20 sheds) the demand of duty has been raised, which in our view cannot sustain. 21.6 The department has mainly relied on 711 invoices seized from the premises. In the impugned order the Commissioner (Appeals) has not rendered any finding as to how these 711 invoices are admissible and acceptable in evidence. Further, if such large quantities of fireworks are alleged to be manufactured and sold, there should be proper evidences for purchase of raw materials. The impugned order does not reason this out. The buyer and transporter have denied their statements during cross examination. Shri. Prasad who is said to have prepared the invoices and also signed them has not been examined at all. His statement was not recorded. The authenticity of these 711 invoices remains in the dark. The confirmation of duty on the basis of these 711 invoices therefore cannot sustain. 21.7 Another allegation is that the appellant has used the brand name 'Parrot' which belongs to M/s. Premier Fireworks which was run by Shri. Vadiv....