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TMI Blog2011 (7) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... were under a brand name 'FRANKE' which belonged to their holding-company namely M/s NIROPLAN AG (registered under German law). Therefore, the benefit of the relevant SSI Exemption Notification (No. 8/2000-CE dated 1.3.2000) was proposed to be denied to them in a show-cause notice which also proposed to confiscate the goods and impose penalty on the manufacturer. The show-cause notice was issued within the normal period of limitation, though it alleged, against the manufacturer, suppression of facts with intent to evade payment of duty. Confiscation was proposed under Rule 173Q of the Central Excise Rules, 1944, while penalty was proposed under Section 11AC of the Act read with Rule 173Q. All these proposals were contested by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt deed, the assessee had exclusive right to use the brand name in India. In the circumstances, they believed bona fide that their claim for SSI exemption was not hit by the relevant provision of the Notification. In the circumstances, according to the learned consultant, the confiscation of the goods and imposition of penalty are both unsustainable in law. 3. The learned SDR has opposed this plea of the learned consultant. He submits that the assessee never disclosed to the department the fact that they were intending to affix the brand name of the German company on their goods. In this connection, he has referred to certain correspondence between the assessee and the department. Incidentally, the learned consultant also has referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tage, concedes their duty liability, which amounts to concession that they were not entitled to the SSI exemption for the period of dispute. If there is any short-payment, it is for the department to take appropriate action. We are not impressed with the argument that the assessee had no intent to evade payment of duty. It appears from the records that the crucial fact that the goods were intended to be cleared under the brand name belonging to the German company was not disclosed to the department before the period of dispute. Some of the letters of the assessee did mention the SSI Exemption Notification but did not disclose the fact that they intended to affix another company's brand name on their products. The relevant para of the SSI Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the minimum fine of Rs 5000/- will serve the purpose. We, therefore, reduce the quantum of fine to Rs 5000/-. 7. The penalty imposed under Section 11AC of the Act read with Rule 173Q has also been challenged on the ground that the assessee had no intention to evade payment of duty. Now that we have already rejected the said ground, the penalty has to be sustained. A penalty under Section 11AC is mandatory where suppression of any material fact with intent to evade payment of duty is established by the Revenue against the assessee. In this case, suppression stands established. Hence the mandatory penalty equal to duty has to be sustained. It is ordered accordingly. 8. The appeal is disposed of in the aforesaid terms. (Dictated in Court.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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