2005 (10) TMI 121 - AT - Central Excise

Summary

Issues:
Exemption of Central excise duty based on factory location in a Gram Panchayat area and affixation of another person's brand name on excisable goods.

Analysis:
The appellants, engaged in manufacturing P & P medicines and room air fresheners in aerosol spray form, claimed exemption from Central excise duty, citing their factory's location in a Gram Panchayat area. They sold air fresheners with brand names like 'Traxol' and Cachet Pharmaceuticals' logo, which belonged to another company. The lower authorities denied the exemption, stating that the appellants were not entitled to it due to the affixation of another person's brand name on the goods.

Upon hearing both sides, it was noted that the demands were for a specific period, and the Show Cause Notice was issued beyond the normal one-year period. The appellants believed they were selling the aerosol cans under their own brand names, not of another person, as per a Board circular. Additionally, their factory was located in a rural village area, making them eligible for Small Scale Industry (SSI) exemption during that period. The plea of demands being time-barred was upheld, following established legal principles.

The Tribunal highlighted a precedent where using a brand name of another person did not affect SSI exemption eligibility if the goods' brand names were different from the registered brand names. This principle was reinforced by a Supreme Court judgment. Therefore, the Tribunal set aside the lower authorities' decision and allowed the appeal solely on the grounds of limitation, emphasizing the appellants' bona fide belief as a strong factor in this case.

In conclusion, the appeals were allowed based on the limitation aspect, with the Tribunal emphasizing the importance of the appellants' belief and the specific legal principles regarding brand names and SSI exemption eligibility.