TaxTMI 
TaxTMI 
2004 (2) TMI 135
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.... No. 175/86-C.E., dated 1-3-86 (as amended), to M/s. Mercury Laboratories Pvt. Ltd., Baroda [hereinafter referred to as 'M/s. MLL']. It was alleged that the benefit of SSI exemption was not admissible to the goods (which had allegedly been cleared under the brand-name of another person [M/s. MLL] not eligible for the benefit of the above Notification) on account of the bar contained in paragraph 7 of the Notification and therefore duty should have been paid on the goods at the normal rate of 15%. It was also alleged that the above goods cleared to M/s. MLL had been undervalued and that duty should have been paid by the appellants on the goods at the price at which M/s. MLL cleared the goods to their customers. It was on the basis of these allegations that the show cause notice raised the above demand of differential duty. The SCN had also proposed to impose penalty on the partners of the appellant-firm, Sh. Nandkishore B. Desai (appellant in Appeal No. E/1311/2001) and Sh. Kiranbhai D. Patel (appellant in Appeal No. E/1312/2001) under Rule 209A of the Central Excise Rules, 1944. The adjudicating authority rejected the Department's allegation of undervalution and held that M/s. MLL ....
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....ption. Ld. Counsel relied on the Supreme Court's decision in the case of P & B Pharmaceuticals (P) Ltd. v. C.C.E. [2003 (153) E.L.T. 14 (S.C.)]. Counsel further submitted that the Commissioner had not considered the appellants' plea of time-bar against the demand of duty. The appellants had not suppressed any facts from, or mis-stated any facts to, the department with intent to evade payment of duty. They had filed classification lists from time to time and the same were approved by the proper officer of Central Excise. They had also filed price lists which were also approved. The RT 12 returns filed by them for the relevant period were also assessed finally by the proper officer without raising any objection. All queries of the department were satisfactorily answered. If the agreement dated 6-1-88 was not disclosed to the department, it was only because the said agreement was never implemented. Therefore, there was no justification in invoking the larger period of limitation. Counsel submitted that, in the absence of mens rea, penalty was also not warranted in the case. It was also contended that, when the firm was penalized, its partners were not liable to be penalized separately....
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....laimed or disowned by the appellants. They have only said that the agreement was never implemented. The agreement (copy produced by Counsel) - signed by Sh. R.R. Shah (Director of MLL) and Sh. Kiran Patel (Partner of Sarpin Pharmacal) - had only four clauses reading : "1. Mercury agrees to sell their brand names 'Merizyme Elixir' and 'Merizyme Drops' to Sarpin at a royalty of Rs. 0=05 and Rs. 0=03 per bottle respectively. 2. The two products viz. Merizyme Elixir and Merizyme Drops will be manufactured by Sarpin Pharmacal as per the specifications/formula supplied to Mercury Laboratories Pvt. Ltd., Baroda in respect of quality and Quantity. 3. Sarpin will not sell these brand names to any other party without prior written consent of Mercury. 4. This agreement will be valid upto the 5th day of January One Thousand Nine Hundred Ninety, and can be terminated on mutual consent and/or for breach of any of the conditions (1) to (4) above." Shri R.R. Shah, in his cross-exami....
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....he ratio of the decision in the cited case is applicable to the instant case, wherein the assessee never acquired ownership of the brand-names from M/s. MLL during or prior to the period of dispute. 5. It is true that the Commissioner has not examined the limitation issue. However, we are not inclined to remand the case on this score in view of the fact that this two-decade-old case has already suffered a number of remands. The show cause notice invoked the larger period of limitation, alleging inter alia that the appellant-firm had suppressed from the department the fact that they had cleared the goods in question under brand-names owned by another person, who was not eligible for the benefit of Notification No. 175/86-C.E. (as amended). We find that this allegation stands proved in this case. The appellant-firm was aware of the fact that the brand-name belonged to M/s. MLL. This knowledge dates back, at least, to 6-1-88, the date on which they signed the agreement with M/s. MLL. The appellant-firm was, therefore, aware of the fact that they had cleared their medicines under the brand-names of M/s. MLL during the period of dispute. They could not have pleaded ignorance of the b....