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TMI Blog2013 (12) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct and also mentioning the fact of "Mfgrs. manufactures By Quantum instruments & Electronics, Bhopal in Technical Collaboration with Silcher Electronics Ltd." and also their Logo. Show Cause Notice was issued by the department demanding the duty denying the small scale exemption for the period Feb, 97 to March, 99. The Show Cause Notice was confirmed by the Original Authority and demand of Rs.2,53,821/- along with interest was confirmed against the respondents and equal amount of penalty was imposed of the respondents. The penalty of Rs.10,000/- under Rule 173Q of the Central Excise Rule was also imposed. The respondent filed on appeal before Commissioner of Central Excise (Appeal), who vide the impugned order has allowed their appeal and the Order-in-Original was set aside. Revenue has filed this appeal against the impugned order in appeal. 3. Ld. DR appearing for the Revenue submits that the stickers pasted on the transformers by the respondents bear the logo of "SEL. It is the brand name/trades name of M/s. SEL who is an established manufacturer of the same product. The sticker in this case shows the connection between the goods and the SEL M/s. SEL has entered in agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating the connection in course of trade between the product and the other person. The Hon'ble Court in para 13 of the judgment has held as under: 13. As has been set out herein above, in this case there s no denial that M/s. Grasim Industries Ltd. were manufacturer of cement. There is also no denial that the purpose of using the words: "Manufactured by Dharani Cements Ltd. A Subsidiary of Grasim Industries Ltd." Was with an intention of indicating a connection between the product i.e. the cement and M/s. Grasim Industries Ltd. In such cases, clearly the Respondents were using a trade name of some other company with the purpose of indicating a connection in the course of trade between the product and that person. The Respondents were therefore clearly not entitled to the benefit of the Notification. The decision of the Tribunal is therefore clearly erroneous and requires to be set aside. We find and in the present case the name of Silcher Electronics Ltd. and logo of SEL is mentioned on the goods manufactured by the respondents. The logo indicates a connection between the M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the said exemption notification to the party also and set aside the demand of duty." 10. As seen from the above, the appellate authority has relied upon the declaration of law by the Tribunal in the case of M/s. HOD Laboratories Ltd. The Revenue in their memo of appeal has relied upon the Supreme Court decision in the case of Grasim Industries Ltd., which was delivered in 2005 i.e. subsequent to the Tribunal's decision in the case of HOD Laboratories. Apart from that I also note that the law during the relevant period was not very clear and there are many earlier decisions of the Tribunal and of various Courts laying down that affixing some words showing connection with the brand name owner or related to the brand name of the Group, along with the assessee's own name will not amount to use of brand name of other person. One such reference can be made to the Hon'ble Supreme Court decision in the case of CCE vs. Vikshara Trading & Invest P. Ltd. [2003 (157) ELT 4 (SC)] as also to Kerala High Court decision in the case of Commissioner vs. Mamma Products [2009 (235) ELT A 147 (Ker)] laying down that where there was common ownership of brand name where product is marketed in exclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company of such strong words as fraud, collusion, willful default has to be construed strictly and it has to be a deliberate act. Similar views stand expressed by the Hon'ble Supreme Court in the case of CCE vs. Chemphar Drugs & Liniments [1989 (40) ELT 276 (SC)]. 12. When viewed in the light of declaration of law by the Hon'ble Supreme Court, the circumstances available to the revenue for invocation of longer period of limitation have to be a deliberate malafide action on the part of the assessee and not a mere statement as regards the period for which the logo of SEL was affixed. Whether there can be some bonafide belief on the part of the assessee to entertain a view that they were entitled to avail the benefit of notification or not is to be gathered from the circumstances. When during the relevant period, the declaration of law by the higher authorities was to the contrary, it can be reasonably presumed by the assessee and a reasonable belief can be entertained by him that such affixation of logo and any writing of words would not amount to use of brand name of a third person. 13. Apart from the above, I find that Commissioner himself has granted relief to the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there under. Therefore while the penal provisions of section 78 are not attracted, the penalty imposable under section 77 is liable to be waived under section 80. I, therefore, agree with the view of learned Member (Judicial) that in the circumstances of the case, penalty on the Respondent under section 77 & 78 of the Finance Act 1994 is not warranted." 14. In view of the above majority decision, it stands held that where the notification or a particular provision of law is capable of two different interpretation, and when Commissioner (Appeals) has himself interpreted the law in a particular manner, the assessee cannot be held guilty of any malafide. In the present case, as already discussed, the earlier decisions prior to the Grasim Industries were in favour of the assessee, which also stand followed by Commissioner (Appeals) and as such, it cannot be held that the assessee was guilty of any mis-statement or suppression of fact with intent to evade payment of duty. 15. As such, I am of the view that demand having been raised beyond the period of limitation is barred by limitation and on the above ground the Revenue's appeal fails. Archana Wadhwa, J. Difference of Opinion &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was confirmed along with interest and penalty of equal amount was imposed on the Respondent under section 11AC and another penalty of Rs.10,000/- was imposed on them under section 173Q. On appeal being filed against this order to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dt. 04.11.04 set aside the order relying upon the Tribunal's judgment in case of CCE Indore Vs. HOD Laboratories Ltd., reported in 2004 (172) ELT-458 (Tri.) wherein it was held that when a manufacturer clears the goods manufactured by him by affixing his own brand name along with logo of the promoter/ marketing agent, the benefit of SSI exemption under Notification No.1/93-CE can not be denied. 16.1 The Revenue filed appeal against the above judgment of Commissioner (Appeals) wherein the Revenue relied upon the Tribunal judgment in case of Chopra Appliance reported Vs. CCE, Delhi, reported in 2007 (132) ELT- 95 (Tri. Del.) 17. The Revenue's appeal was heard on 02.01.13. While Hon'ble Member (Technical) taking note of the facts that the goods, in question, manufactured and cleared by the Respondent were having not only the logo of M/s. SEL printed on them but also the words "Manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the printed words "manufactured by Quantum Instrument & Electronics, Baroda in technical collaboration with SEL, Baroda", that the fact of using the logo of SEL, Baroda on the Transformers being manufactured by them was never disclosed by them to the Department, that eligibility for SSI exemption is dependent upon whether or not the goods manufactured and cleared by the manufacturer are affixed with the brand name/logo of another person, that when the Respondent were using the logo of SEL, Baroda on their products, they should have disclosed this fact to the Department and non disclosure of this fact would amount to suppression of relevant facts with intent to evade the duty, that there was no confusion or controversy on the point of dispute in this case, as the Tribunal in case of Chopra Appliance reported Vs. CCE, Delhi, reported in 2007 (132) ELT- 95 (Tri. Del.) has held that when the goods manufactured by an assessee were cleared by affixing the brand name/logo of another person he would not be eligible for SSI exemption, even if along with the other person's brand name/logo, the manufacturer's own brand name is also affixed on the goods, that this judgment is squarely applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Baroda who had provided the technology and technical assistance to the Respondent for manufacture of R-Core Transformers in terms of an agreement with them can not be said to be the promoter or marketing agent of the Respondent and as such the judgments of the Tribunal in case of HOD Laboratories Ltd.(Supra) and Ark Laboratories (Supra) are not applicable at all. This is a case of use by a manufacturer of another person's brand name/logo along with his own brand name. The Tribunal in case of Chopra Appliances, reported in 2007 (32) ELT-95 (Tri.) has clearly held that when the LPG Stove manufactured by the Appellant were cleared by affixing his own brand name along with brand name "SKN" of another manufacturer of LPG Stove, the SSI exempt would not be available. In my view the Tribunal's judgment in case of Chopra Appliance (Supra) is squarely applicable to the facts of this case. 21.1 In the case of Grasim Industries Ltd. reported in 2005 (183) ELT-123 (SC) decided by the Apex Court, the dispute was regarding availability of exemption Notification No.5/98-CE to the cement manufactured by M/s. Dharani Cement Ltd., which is a subsidiary of M/s. Grasim Industries Ltd. The cement pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Ark Industries (Supra) are not relevant at all to the issue involved in this case. 21.4 As regards the Apex Court judgment in case of CCE Vs. Vikshara Trading and Investment Pvt. Ltd.(Supra), the point of dispute in this case was as to whether SSI exemption would be available when the goods manufactured by a manufacturer are affixed with brand name/logo of another person who uses that brand name/logo on different class of goods. Thus the issue involved in the case of Vikshara Trading and Investment Pvt. Ltd. decided by the Apex Court is totally different from the issue involved in this case. 21.5 In the case of Commissioner Vs. Mammo Products (Supra) decided by Hon'ble Karnataka High Court, the brand being used by M/s. Mammo Products on the goods being manufactured by them was jointly owned by them with another person and it is in these circumstances that the Tribunal held that the M/s. Memo Products would be eligible for SSI exemption and this judgment of the Tribunal was upheld by Hon'ble Karnataka High Court. Thus issue involved in the case of Commissioner Vs. Mammo Products(Supra) is also totally different from the issue involved in this case. 21.6 There were conflictin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e inaction or failure on the part of the manufacturer or conscious or deliberate withholding of information, when the manufacturer knew otherwise, is required for invoking the longer limitation period of five year under proviso to Section 11AC(1). In the case of Pushpam Pharmaceuticals Company Vs. CCE, Bombay reported in 1995 (78) ELT- 401 (SC) the Apex Court interpreting the expression "suppression of facts" in the proviso to Section 11AC(1) held that since this expression has been used in the company of such strong words as 'fraud' 'collusion' on wilful default - this expression has to be interpreted strictly and mere omission to disclose the correct information is not suppression of facts, unless it was deliberate to escape from payment of duty and that when the facts are known to both the parties, omission by one to do what he might have done and not that he must have done, does not render it suppression. The Apex Court in case of Continental Foundation Joint Venture reported in 2007 (216) ELT-177 (SC) and Jaiprakash Industries Ltd. reported in 2002 (146) ELT-481 (SC) has held that when on account of various circulars operating at different point of time or conflicting judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to evade the duty and burden would shift to the assessee to prove his bona fide. In the system of self assessment under Rule 6 of the Central Excise Rules, 1944, in which the Assessee himself assesses the duty payable by him on the goods cleared during a month and the role of assessing officers is to scrutinize the return filed by the Assessee containing detailed information about the duty self assessed, it is the responsibility of the Assessee to furnish full and complete information and if he is availing of some exemption which is subject to fulfillment of certain conditions, he is expected to state clearly in the return as to whether he fulfills the conditions or not. Simply mentioning in the ER-1 Returns about availment of some conditioned exemption notification without mentioning anything about fulfillment of the condition of the notification would amount to wilful suppression of facts if subsequently, it is found that the condition of exemption notification had not been fulfilled. 22.2 Apex Court in case of Dharampal Satyapal Vs. CCE, New Delhi reported in 2005 (183) ELT (241) (SC) in para 22, 23 & 24 had held as under:- 22. It was urged that the assessee was u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994 was substantially equal to the demand for duty herein and, therefore, there was no intention to evade payment of duty. 24. We do not find any merit in these submissions. As stated above, the adjudication in this case was confined to the question of excisability and concealment of the existence of two units in which the compound (kimam) was manufactured. No explanation has been given by the assessee for not disclosing the affairs of these units, particularly when the assessee was in business for couple of years and when the assessee had been dealing with other traders who operated from licensed factories. It was for the assessee to explain the reasons for not getting the units registered or licensed. It was for the assessee to explain its failure to maintain the records under the 1944 Act and rules there under. In each of the above decisions, we find that there was substantial compliance of the rules under the said Act. In each of the decisions the findings indicate technical non-compliance and not total non-compliance of the rules. It was for the assessee to explain the basis of its alleged bona fide impression. In this connection, no evidence was put before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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