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2015 (11) TMI 1245 - CESTAT NEW DELHI

2015 (11) TMI 1245 - CESTAT NEW DELHI - 2015 (329) E.L.T. 359 (Tri. - Del.) - Denial of SSI Exemption - Use of other's brand name - Seizure of goods - Imposition of redemption fine and penalty - Held that:- Appellant were manufacturing the brake linings using brand name-TVS and Rane and also brake linings using their brand or other brands which are not owned by any particular person or unbranded brake linings. The Commissioner in the impugned order has denied SSI Exemption in respect of only bra .....

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goods has been determined on the basis of the quotations given by the three traders M/s. Masu International, M/s. Serbestos Auto International and M/s. Minocha Metals (P) ltd.

It is not the department s case against the appellant that the appellant had any agreement with TVS and Rane for manufacture of brake linings as per their standards and specifications and could use their brand name. The appellant were obviously using the brand name TVS and Rane on certain brake linings manufact .....

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statement of Shri Pradeep Kumar Goel and his factory Supervisor Shri Satender Kumar has taken the stand that this production has been recorded in the terms of sets, each set being of eight brake linings, while the appellants stand is that the production in these registers is not in sets but the numbers mentioned are the number of brake linings not of the sets of brake linings. There is nothing in the registers from which it can be inferred that the production recorded therein is in terms of set .....

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es of RPM is in terms of sets of brake linings is not sustainable and accordingly, the production recorded in these registers is to be treated as production of that many brake linings not of the sets of brake linings - Impugned order is set aside and the matter is remanded to Commissioner for re-quantification of the duty liability in terms of our observations in this order - Decided in favour of assessee. - Appeal No. E/2257, 2269 and 2271/2005-EX [DB] - Final Order No. 51697-51699/2015 - Dated .....

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the brand name of TVS, Charlie, Mintex, Rodex, Rane, Mark, Farodo, etc. The brake linings were chargeable to Central Excise Duty under heading 6806 of the Central Excise Tariff. There is another Unit M/s. PEE KAY Enterprises having factory at P-38B, Gali No. 15, Bihari Colony-Shahadara, Delhi (hereinafter referred to as PKE) which is partnership concern of Shri Pradeep Kumar Goel, Shri Ashok Kumar Goel, Shri Manoj Kumar Goel and Shri Mukesh Kumar Goel, all real brothers and is engaged in manufa .....

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ral Excise Registration or were paying duty. According to the appellants, both the units, at that time, were within full exemption limit of the SSI Exemption notification. In course of search of the factory premises, the officers found that both-RPM and PKE, besides clearing the brakeing linings manufactured by them under their own brand names Raymond, Charlie and Allied, were also using the brand name of other persons, i.e., TVS and Rane. According to the department, the goods affixed with the .....

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he appellants cleared the goods affixed with the brand name TVS and Rane of other persons without payment of duty, the department has made the following allegations: i) It has been alleged that the factory premises of RPM and PKE were owned by the same familys four brother- Shri Ashok Kumar Goel, Shri Pradeep Kumar Goel, Shri Manoj Kumar Goel and Shri Mukesh Kumar Goel and were being actually controlled by Shri Ashok Kumar Goel and that their account of procurement of the raw material, manufact .....

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ings bearing the brand names TVS and Rane has adopted the value based on the price list of the owners of these brand names after 40 per cent discount. In respect of the brake linings which were described in the invoices in terms of the vehicles for which they were meant, the department conducted market enquiry and based on the opinion of three traders-M/s. Masu International, M/s. Serbestos Auto International and M/s. Minocha Metals (P) ltd. have determined their value. iii) The third allegation .....

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iplying that number by 8. 1.5 During the search of the premises of RPM and PKE, certain stock of brake linings had been seized from both the premises and also from the premises of the shop and godown of PKE and that the stock had also been placed under seizure. 1.6 In view of the above investigation, a show cause notice dated 15/12/1999 was issued to RPM, PKE, Shri Pradeep Kumar Goel, Shri Ashok Kumar Goel and Shri Manoj Kumar Goel and Shri Mukesh Kumar Goel for- (a) confiscation of the brake li .....

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ct, 1944 on Shri Pradeep Kumar Goel, proprietor of RPM and Shri Ashok Kumar Goel and Shri Manoj Kumar Goel, partners of PKE. 1.7 The above show cause notice was adjudicated by the Commissioner vide order-in-original dated 19/2/2000 by which the entire duty demand as mentioned above was confirmed against RPM along with interest on it under section 11AB and besides this, penalty of equal amount was imposed on RPM under section 11AC. The Commissioner also imposed penalty under Rule 209A of Central .....

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udication with certain directions. The Tribunal in the remand order observed that the impugned order has not considered the brake linings product wise or brand name owner wise and, therefore, it is necessary in the interests of justice that the case is remanded to the original authority for de-novo adjudication after considering the evidence on record along with the appellants defence on the allegation that the brake linings, in question, were manufactured under the brand name of other persons. .....

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er section 11AB and imposed penalty of equal amount on it under section 11AC. Certain amount which had been deposited during investigation was ordered to be appropriated. Commissioner also ordered confiscation of the seized goods with option to be redeemed on payment of redemption fine in lieu of confiscation and besides this, he also imposed penalty of ₹ 4 lakh each on Shri Pradeep Kumar Goel, proprietor RPM and Shri Ashok Kumar Goel, partner of M/s. PKE. He decided not to impose any pena .....

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K. Jain, Advocate, ld. Counsel for the appellants, pleaded that while the Commissioner in the earlier order-in-original passed in the year 2000 had treated all the clearances made by RPM and PKE as of branded goods, in the de-novo proceedings, the Commissioner in terms of the directions in the CESTATs remand order has quantified the value of the clearances of the brake linings in respect of which the brand name TVS and Rane had been used and has demanded duty only in respect of that quantity of .....

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r which there is absolutely no justification; that the goods being cleared with the brand name TVS and Rane were duplicate goods as the appellant did not have any agreement with the brand name owners for use of their brand name and manufacture the goods as per their specification; that in view of this, in respect of the goods cleared with the brand name TVS and Rane, there was no justification for adopting the price at which the goods were being sold by the brand name of owners; that as regards .....

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, that there is no record of purchase of the raw material required for manufacture of the quantity of the brake linings which is alleged to been manufactured by them; that as regards the allegation of the clubbing of the clearances of RPM and PKE, the Commissioner himself in para 59 of the impugned order has given the finding that while statement of partners of PKE did suggest that the accounts were maintained jointly for both the units, i.e., PKE and RPM, there is no independent evidence to sup .....

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clubbing cease to be an issue; that thus, the only issues which have to be decided are the issue of valuation and issue of quantum of alleged clandestine clearances; that as regards, the issue of valuation, there is absolutely no justification to reject the value of the goods shown in the invoices issued by the appellant and that as regards the quantum of goods alleged to have been manufactured which has been determined on the basis of three registers recovered from the premises of RPM, there i .....

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gs of the Commissioner. With regard to the quantum of clearances, he stated that the figures of production as recorded in the three registers recovered from the premises of RPM are the figures of production in terms of the sets, each set being of eight brake linings. He in this regard pointed out to the statement of Shri Pradeep Kumar Goel, proprietor of RPM and Shri Satender Kumar, Supervisor discussed in para 40 of the impugned order wherein it has been stated by them that the quantity of the .....

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d M/s. Minocha Metals (P) ltd. He, therefore, pleaded that the appellant have not only under declared the value of the goods in their invoices but have also suppressed the quantity of the goods produced and manufactured by them so as to wrongly avail of the SSI Exemption. He accordingly, pleaded that there is no infirmity in the impugned order. 5. Shri A.K. Jain, Advocate, ld. Counsel for the appellants, in his rejoinder pleaded that merely on the basis of the statements of Shri Pradeep Kumar Go .....

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t of 42.5 per cent in manufacture of brake linings and on the basis of the certificates of the Chartered Engineers, the appellant could not have manufactured the quantity of brake linings which are alleged to have been manufactured by them based, more so, when there is no allegation that the appellant have purchased extra unaccounted raw material. 6. We have considered the submissions from both the sides and perused the records. 7. In the present proceedings, the dispute is only on two points: ( .....

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rand name TVS and Rane or sold under other brand names or sold without any brand has not been determined on the basis of the price declared in the invoices. In this regard, the Commissioner in respect of the brake linings bearing brand name TVS and Rane has adopted the price at which the brand name owners were selling the same goods and the value of the goods of other brand or unbranded goods has been determined on the basis of the quotations given by the three traders M/s. Masu International, M .....

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by them have to be treated as duplicate brake linings. In view of these circumstances, in our view, there is no justification to value these brake linings at the price at which such brake linings were being sold by the brand name owners. 7.3 As regards, the goods bearing the other brand name or unbranded goods, we find that the there is absolutely no justification for rejecting the invoice price of these goods as mentioned by the appellant in their invoice and valuing the goods on the basis of t .....

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able and the value of the goods as mentioned in the invoices issued by the appellant company has to be adopted. 8. The second point of dispute is regarding quantum of goods which are alleged to have been produced by RPM and cleared by them. The actual production of RPM has been determined on the basis of three registers recovered from the premises of RPM. The department, however, based on the statement of Shri Pradeep Kumar Goel and his factory Supervisor Shri Satender Kumar has taken the stand .....

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