TMI Blog1998 (3) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... and physical verification of goods and raw-materials, the officers found that there was a shortage of seven air-conditioners of 1.5 tonnes capacity valued at Rs. 57,960/- as well as three compressors on which Modvat credit of Central Excise Duty to the tune of Rs. 20,720/- had been taken. On the basis of further investigation the Department found that the appellants had also removed 14 numbers of air-conditioners of 1.5 tonne capacity without filing proper classification list and without determination and payment of proper excise duty. Accordingly, present appellants were issued a SCN dated 27-9-1993 charging them with contravention of the provisions of Rules 9(1), 52A, 53, 57F(1), 173F, 173G and 226 of the Central Excise Rules, 1944 apart from calling upon them to show cause why penalty under Rule 173Q should not be imposed and why the extended period of 5 years under proviso to Section 11A (1) of the Central Excise Act, 1944 should not be invoked. 4. The matter was adjudicated by the Collector who passed the impugned order. As regards the allegation of clandestine removal of seven air-conditioners, the Collector held that the assessees explanation that these were removed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Equipments had procurred the air-conditioners from the appellants and therefore the conclusion was inescapable that the appellants had manufactured air-conditioners bearing the brand name Accord . He rejected the contention of the appellants that the invoices issued to M/s. Accord Equipments for the sale of air-conditioners did not mention the brand name Accord as of no consequence. Collector further referred to the statements given by Shri Abay Shinghal, Partner of Coolair Industries and Shri Rajiv Sahay, Partner of M/s. Accord Equipments, neither of which admitted to the affixing of the brand name or trade mark Accord on the air-conditioners manufactured by M/s. Coolair. In his statement dated 29-4-1992, Shri Abay Singhal had only stated that the brand name Accord was owned by M/s. Accord Equipments and that they (M/s. Coolair Industries) had entered into an agreement dated 17-3-1990 that the appellants will supply 20 numbers of split window type air- conditioners to M/s. Accord Equipments. 5. Shri B.B. Gujral, ld. Counsel appeared for the appellants and Shri P.K. Jain, ld. SDR appeared for the Department. 6. Ld. Counsel submitted that as regards the allegation relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the invoices and delivery challans. Ld. Counsel also submitted that the Counsel for the present appellants had sought time from the Collector for submitting further written submissions and without granting them adjournment as requested by the Counsel for the present appellants, the Collector had proceeded to pronounce the order-in-original. This has resulted in violation of the principles of natural justice. He also referred to the observations made by the Collector in the impugned order casting serious doubts about the reliability of the statement of Shri Rajiv Sahay, Partner of M/s. Accord Equipments. Since the whole case of the Department relating to the 14 air-conditioners was built on the basis of statement of Shri Rajiv Sahay, the conclusion reached by the ld. Collector was not well founded. He also relied on the Tribunal decision in Madura Coats v. C.C.E. reported in 1996 (82) E.L.T. 512 in support of his argument that where brand name is affixed after the manufacture, no contravention can be alleged. He also relied on 1997 (21) RLT 828 in support of his submission on affixing of brand name after manufacture. As regards the extended period of limitation he relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants with M/s. Accord Enterprises to come to the conclusion that the appellants were obliged to manufacture only Accord branded air-conditioners and they were to supply the air-conditioners to M/s. Accord Equipments as their authorised distributors. He had come to the conclusion that in terms of the agreement it was clear that Accord brand name was to be put and had been affixed by M/s. Coolair Industries on the air-conditioners. He had also concluded from the purchase orders that the present appellants were manufacturing Accord brand air-conditioners. We, however, find that neither the clauses of the agreement nor the purchase orders clearly show that the appellants were manufacturing and clearing Accord brand air-conditioners to the customers or that the brand name Accord has been affixed on the air-conditioners by M/s. Coolair Industries and by no one else. We find that the Collector himself has given a finding that the evidence of Shri Rajiv Sahay was not reliable. In view of these facts we are of the view that the findings of the Collector that the appellants had affixed the brand name Accord in the appellants factory premises before clearing the air-condit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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