TMI Blog2016 (4) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... connection with goods and the persons in the ordinary course of trade. In the present case TATA INDICOM is the name of the Telephone Service Provider and does not relate to any excisable goods sold by the service provider in the ordinary course of trade. Therefore, the Apex Court's decision is distinguishable and does not relate to the present case. Whereas we find that, the Boards Circulars dated 27.10.1994, 1.9.1994, 18.1.2000 are validly existing during the disputed period and the adjudicating authority rightly relied on the Circular dated 27.10.2014 wherein it is clarified that so long as the goods are supplied to the customer for further manufacture are not “traded”, the benefit of SSI exemption should not be denied, merely on the ground, that it contains brand name of another unit. The said Circular was valid till 1.9.98 and is binding on the Revenue during the material period and the adjudicating authority rightly followed the said circular. It is pertinent to state that after the apex Court's decision in Kohinoor Elastics Pvt. Ltd. case the government amended the SSI notification vide Notification 47/2008 dt.1.9.2008 allowing SSI benefit to specified goods bearing the br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PER R. PERIASAMI As we are taking up the appeals for disposal, the MISC applications are allowed and disposed. All the nine appeals are taken up together for disposal as the issues involved are similar in nature. 2. (a) E/700/07-Appellant M/s.Santel Communications Pvt. Ltd. filed appeal against the Commissioner of Central Excise and (b) E/701/2007- Shri A.Nagarajan and (c)E/702/2007- Shri S. Muralidharan filed appeals against penalty(d) E/736/2007- Revenue filed appeal against Commissioner of Central Excise order. (e) The remaining appeals of assessees are filed against Commissioner of Central Excise (Appeals) order. I) Appeal E/700/2007, E/701/2007 E/702/2007- Santel Communications Pvt. Ltd. 3. The brief facts of the case are that appellants M/s.Santel Communications Pvt. Ltd. are manufacturing excisable goods. Appellant was issued with SCN dt.4.10.2006 on the ground that appellants have not registered with Central Excise department and not paid appropriate central excise duty on the excisable goods manufactured i.e. Basic Wired Telephone Instruments bearing the brand name of SANTEL with M.R.P. Appellants also imported telephone instruments bearing the bra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ischarged Central Excise duty and manufactured and cleared telephone instruments bearing others brand name of SANTEL and TATA INDICOM. Appellants imported telephone instruments from Hong Kong bearing the brand names of GE AT T and SFX 111 fax machines bearing the brand name of SANYO and cleared the goods after relabeling and affixing the M.R.P with the brand name of GE, AT T and SFX 111 fax machines bearing the brand name of SANYO. SCN dt. 9.10.2006 was issued demanding an amount of ₹ 27,41,329/- under proviso to subsection (1) of Section 11A of the Central Excise Act and proposed penalty under section 11AC and also proposed for appropriating the amount of ₹ 2 lakhs already paid and also penalty on others. The Additional Commissioner in his order dt. 13.8.2007 confirmed the demand of ₹ 27,41,325/- and denied SSI benefit on the goods bearing others brand name of TATA INDICOM and SANTEL and appropriated ₹ 2 lakhs already paid and imposed equivalent penalty under Section 11AC of ₹ 27,02,772/- under Section 11AC and imposed penalty of ₹ 5 lakhs on Shri S. Ganesan, Director of the company and of ₹ 2,50,000/- on Shri S.Muralidharan, Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturing activity involved and it is only assembly fixed on the components. He drew our attention to para-4 5 of the SCN and the duty was computed after allowing SSI benefit. He drew our attention to para-9 of SCN where the SSI exemption was allowed and referred to para-7 of OIO. He submits that at the time of importing the parts in CKD condition they were already bearing the names of SANTEL . They have only affixed the MRP sticker bearing imported and marketed by appellant SANTEL Communications (P) Ltd., before selling the said goods through their dealers. He submits that Note 6 of Section XVI of Chapter 84 is not applicable as there is no manufacturing activity carried out and it is only a simple connecting parts using Screw Driver Technology. He submits that section 2 (f) was amended w.e.f. 1.2.2003 only. He referred to Notification No.36/2004 wherein appellants are not required to take registration when the goods are chargeable to Nil rate of duty. He relied on the following case laws :- (i) T.S.Cycles of India Vs UOI -1983 (12) ELT 681 (Mad.) (ii) Walchand Nagar Industries Vs CCE Pune -1995 (79) ELT 485 (T) (iii) CCE Chandigarh Vs Bhalla Enterprises-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and SANTEL for the same period. He further drew our attention to relevant para of OIA on the allegation on web page of SANTEL relied by the department and submits that the web page is not relevant as the said goods were imported from Hongkong and not from any SANTEL. This was not the webpage of Santel company. Regarding adjudicating authority holding that Santel Industries filed application for registration before Trade Marks Authority, that application was rejected. He further submits that Santel Industries first started manufacturing the goods which has no registration with brand name of anybody. Trade Mark authority has already rejected the application of Santel Industries. He relied on the following case laws :- (1) Garnier Solutions Vs CCE Bangalore-2008 (232) ELT 311 (Tri.-Bang.) (2) CCE Chandigarh Vs Bhalla Enterprises-2004 (173) ELT225 (SC) (3) CCE Kolkata Vs Nitin Electronics Corpn.-2003 (160) ELT 605 (Tri.-Kolkata) (4) Leo Rubbers Vs CCE Hyderaba-2006 (203) ELT 49 (Tri.-Bang.) 11. On penalty, he submitted that Director of the company and other co-noticees are not liable for penalty. He further submits that since the Commissioner of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 (264) ELT 481 (SC) (2) Nitin Patki Vs CCE Thane-II- 2011 (273) ELT 104 (Tri.-Mumbai) (3) Kadex Stear (P) Ltd. - 1999 (114) ELT 212 (Tribunal) (4) CCE Calcutta Vs Emkay Investments (P) Ltd.- 2004 (174)ELT 298 (SC) (5) B.P.L. India Ltd. Vs CCE Cochin- 2002 (143) ELT 3 (SC) (6) Eagle Flask Industries Ltd. Vs CCE Pune- 2004 (171) ELT 296 (SC) In respect of other appeals, SSI benefit has been rightly denied by the adjudicating authority and the Commissioner (Appeals) has rightly upheld OIO. 13. In rejoinder, learned advocate countered the arguments of A.R both on limitation as well as on merits. He further submits that Department relying on the case of CCE Bhopal Vs Quantum Instruments Electronics (supra) is in favour of assessee. He referred to para-21 of the said Tribunals decision. He further submits that there are conflicting decisions and various Boards circulars which are in favour of the appellant. He submits that suppression cannot be invoked in this case. The decision relied by Revenue in the case of CCE Vs. Mehta Co. (supra) is not applicable and there is no intention to evade duty. He relied on the SCN which proposed only for demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The Commissioner of Central Excise in his impugned order held that the process of assembling of telephone parts amounts to manufacture and the act of altering the R.S.P and M.R.P would amount to manufacture in terms of Section 2 (f) (ii) of Central Excise Act and allowed the benefit of SSI exemption on the telephone instruments bearing the brand name of TATA INDICOM held in favour of appellant. Both the assessee and Revenue preferred appeals. 17. In the assessee s appeal (E/700, 701, 702/2007), the appellant contended that, on merits, the process carried out by them would not amount to manufacture as the entire parts and instruments were imported in CKD condition and they have only assembled the parts. It was also contended that they were not required to take any central excise registration as they are well within the SSI limit, that merely affixing of M.R.P sticker is not amounting to manufacture . On the issue whether process carried out by assessees, amounted to manufacture , we find that the adjudicating authority has discussed the issue in his findings at para 7 to 13. He dropped the demand in respect of imports of fully assembled basic wire telephone instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant assembling various parts to make it complete telephone instrument amounts to manufacture and chargeable to Central Excise duty. Therefore, appellants relying of citations of Indian Xerograpic System Ltd. Vs CC Bombay (supra), CC Vs Hindustan Motors Ltd. (supra), T.S. Cycles of India Vs UOI (supra) and M/s.Walchand Nagar Industries Vs CCE Pune (supra) are not applicable to the facts of the present case as these decisions were rendered prior to amendment of Section 2(f) (iii) of the Act. 19. Further, we find that the adjudicating authority demanded excise duty and allowed SSI exemption benefit cum duty benefit and the cenvat credit on the inputs. 20. On the limitation, the appellant's contention is that the extended period is not invocable as no clear charge was brought out in the SCN and there is no allegation of conscious and deliberate intention to evade payment of duty. We find that the appellants are not registered with Central Excise for manufacture and clearance of excisable goods and not filed any declaration before the department claiming SSI exemption. It is pertinent to see that Notification No.36/2001-CE (NT) dt. 26.6.2001 exempts from Rule 9 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings the role of the persons in evasion of duty and considering the overall circumstances of the case, the penalty imposed by the adjudicating authority is very nominal. Therefore, we do not find any reason to interfere with the penalty. Accordingly, the penalty imposed on Shri A.Nagarajan and Shri S.Muralidharan under Rule 26 of CER is upheld. 24. We now proceed to discuss the revenue appeal (E/736/2007)filed against that portion of impugned order dt. 24.7.2007 where the adjudicating authority extended the benefit of ₹ 1.0 crore exemption limit to the goods telephones bearing the brand name of TATA INDICOM pertaining to the period 2002-03 to 2004-05. The revenue s main ground is that the impugned goods were cleared under the brand name of other person as per para (4) of the notification SSI benefit is not eligible on the said goods. The other major ground of the Revenue is that the adjudicating authority ought to have followed the decision of Apex Court in the case of M/s.Kohinoor Elastics Pvt. Ltd. (Supra) and should not have allowed the ₹ 1.0 Crore exemption limit. 24. On perusal of records and findings, we find that the adjudicating authority dealt the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... packing materials and the said parts already bearing the name of TATA INDICOM . This confirms that the appellant, have not affixed the brand name TATA INDICOM while clearing the said goods and the revenue's plea that the overseas supplier embossed the name as per the direction of the appellants is not relevant and not acceptable. Therefore, the Honble Supreme Court's decision in the case of Collector Vs Vimal Printery [1999 (115)] ELT A 222 (SC)] is squarely applicable to the present case and the adjudicating authority has rightly relied on the above judgement in his order. 27. In view of the above facts, we hold that the Telephones cleared by the appellants bearing the name of TATA INDICOM to the telephone service provider does not amount to usage of other's Brand to attract para-4 of SSI notification and we do not find any infirmity in the impugned order to the extent of allowing SSI exemption benefit to the goods cleared bearing the name of TATA INDICOM . The revenue appeal is liable to be rejected. Appeal Nos.E/624, 625, 626/ 2009: 28. The appellant M/s.Santel Industries filed the appeals against Commissioner (Appeals) order and the facts are ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraphs are reproduced as under: 6. The apprehension of the assessees that they may be denied the exemption merely because some other traders even in a remote area of the country had used the trade mark earlier is unfounded. The notification clearly indicates that the assessee will be debarred only if it uses on the goods in respect of which exemption is sought, the same/similar brand name with the intention of indicating a connection with the assessees goods and such other person or uses the name in such a manner that it would indicate such connection. Therefore, if the assessee is able to satisfy the assessing authorities that there was no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, it would be entitled to the benefit of exemption. An assessee would also be entitled to the benefit of the exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name. 7. The decision in Rukhmani Pakkwell Traders (supra) and Mahaan Dairies (supra) set aside the decision of the Tribunal holding to the contrary in the matter of F ..... 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