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2009 (6) TMI 483 - HC - Central ExciseNon declaration of brand name- suppression- whether CESTAT was justified in holding that non-declaration of brand name does not amount to suppression and hence the limitation period would not apply? held that the answer of this question is negative against the assessee as the assesese was using a brand name or trade name on his goods admittedly which belonged to another and did not disclose them in the classification list. whether in the light of the fact that the assessee had full knowledge of brand name not belonging to them have used the same and not disclosed to the department amount to suppression of facts? held that- the answer of this question is affirmative in favour of the revenue and against the assessee. whether the CESTAT was justified in holding that proviso (2) of section 11 (A) of Central excise Act does not apply? held that- the answer of this question is in favour of revenue and against the assessee as the mark Ram s belongs to the sister company of the respondent. However the sister company was not eligible for exemption nor could the respondent knowing that the mark belongs to another use the same. Thus this case clearly a case of suppression.
Issues Involved:
1. Whether CESTAT was justified in holding that non-declaration of brand name does not amount to suppression and hence the extended period of limitation would not apply. 2. Whether the use of a brand name not belonging to the assessee, without disclosure to the Department, amounts to suppression of facts. 3. Whether the CESTAT was justified in holding that proviso (2) to Section 11(A) of the Central Excise Act does not apply. Detailed Analysis: Issue 1: Non-Declaration of Brand Name and Suppression The court examined whether CESTAT was justified in holding that non-declaration of a brand name does not amount to suppression, thus the extended period of limitation would not apply. The relevant legal provision, Section 11A of the Central Excise Act, 1944, was scrutinized. It was noted that the proviso to Section 11A allows for an extended period of five years for issuing a show cause notice in cases involving fraud, collusion, or suppression of facts. The court found that the respondent used the brand name "Ram's," which belonged to another company not entitled to exemption, and did not disclose this in the classification list. The court held that the use of another's brand name without disclosure constitutes suppression, thus the extended period of limitation applies. Therefore, the court answered this issue in the negative against the assessee and in favor of the Revenue. Issue 2: Knowledge and Non-Disclosure of Brand Name The court considered whether the respondent's use of a brand name, knowing it did not belong to them and without disclosing it to the Department, amounts to suppression of facts. The court referred to the Notification dated 1st March, 1986, and subsequent clarifications in 1988, which stipulated that a manufacturer using another's brand name not eligible for exemption cannot claim the benefit of exemption. The court found that the respondent's non-disclosure of using the brand name "Ram's" in the classification list was a clear case of suppression. The court also referenced the Supreme Court's judgment in Commissioner of C.Ex., Pune v. Vora Products, which held that non-disclosure of using another's brand name constitutes willful default. Thus, the court answered this issue in the affirmative in favor of the Revenue and against the assessee. Issue 3: Application of Proviso (2) to Section 11(A) The court examined whether CESTAT was justified in holding that proviso (2) to Section 11(A) of the Central Excise Act does not apply. The court reiterated that the proviso to Section 11A extends the limitation period to five years in cases involving suppression of facts. Given the factual finding that the respondent did not disclose the use of another's brand name in the classification list, the court held that the proviso applies. The court found that the CESTAT's interpretation was incorrect and devoid of merit. Therefore, the court answered this issue in the negative against the assessee and in favor of the Revenue. Conclusion: The court concluded that the CESTAT erred in its judgment and restored the original order. The appeal was allowed, and the questions were answered as follows: 1. Question No.1: Negative, against the assessee and in favor of the Revenue. 2. Question No.2: Affirmative, in favor of the Revenue and against the assessee. 3. Question No.3: Negative, against the assessee and in favor of the Revenue. The appeal was disposed of accordingly.
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