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TMI Blog2025 (5) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... te during their visit and search of the factory premises of M/s Exotic Industries India (herein after referred as the appellant) (Proprietor- Shri Rajendra Kumar Sureka) at 5/1, Height Road, Liluah, Howrah on 26.12.2013 found a number of plastic bags and cartons stacked inside the premises containing thermo flask with 'Eagle' label. It was found that the premises was shared by the Appellant and M/s Shanti International - a partnership firm having Shri Rajendra Kumar Sureka as one of the partners. Shri Piyush Sureka, representative of said M/s Shanti International tendered a statement recorded under summons before the visiting officers wherein he stated, inter-alia, that apart from manufacture and clearance of goods such as Plastic Hangers, Garment Bags, Connector Clips, sizer and Plastic Boxes etc in the company M/s Shanti International, they were also manufacturing top cap and bottom of the flask and the body is job-worked outside and the same is assembled in the factory and dispatched to Eagle. This work belongs to M/s Exotic Industries India (the appellant herein) and are kept in their factory on behalf of them. 2.1. Shri Rajendra Kumar Sureka in his statement dated 26. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... central excise duty amounting to Rs.2,07,20,373/- (inclusive of cesses), along with interest, from the appellant no. 1 viz. M/s. Exotic Industries (India). He also imposed equal amount of duty as penalty under Section 11 AC of the Central Excise Act, 1944 on the appellant no. 1. A penalty of Rs.25,00,000/- was imposed on the appellant no. 2 viz. M/s. Eagle Home Appliances Pvt. Ltd. under Rule 26 of the Central Excise Rules, 2002. Rs.20,00,000/- already deposited by the appellant during the course of investigation has been appropriated against the demand of central excise duty confirmed. .Aggrieved against the confirmation of the demands of central excise duty along with interest and penalties, both the appellants have filed these appeals. 3. During the course of hearing, the appellant no. 1 submitted that they are a proprietorship concern having office at 203/1, Mahatma Gandhi Road, Parekh Kothi, room No. 310, 3rd Floor, Kolkata- 700007 and godown at 5/1, Height Road, Liluah, Howrah. During the material period, they undertook the activity of purchasing and selling of different items including plastic hangers, connector clips, sizer and plastic boxes etc.; they also used to get Ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name "Eagle" manufactured through dummy manufacturers and not included those value of clearances to their turn over to arrive at the eligibility of SSI exemption. In this regard, the appellant submits that during the course of search of the premises belonging to the Appellant, no plant or machinery were found; there is no allegation either that they were manufacturing the goods on his own. It is on record that they got the goods with the brand name 'Eagle' manufactured through various small manufacturers scattered over rural area who were not liable to excise duty and thus the appellant submits that there is no contrary evidence brought in record by the Department. 3.3. The said appellant further submitted that in the instant proceedings, M/s Shanti International, the partnership firm was not made a party although the effect of clubbing is alleged to be imposed on them as well. It is contended that they are not required to pay any Central Excise duty during the material period under review i.e. 2012-13. The appellant further contended that they did not avail any credit of duty paid on the inputs and in the eventuality, they are required to pay duty, then, by virtue of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orkers. Parts of the flasks manufactured by various job workers along with packing boxes [inner and outer having the brand name 'Eagle"] are sent to an address in village Bhattanagar in Anandpur, Liluah, for final manufacture of the "Vacuum Flask". Thus, we observe that all the parts along with the final packing of the flask with 'Eagle' brand are manufactured in' rural areas' and they receive it and sell it to M/s Eagle Home Appliances Ltd as a trader, as per the agreement entered with them. In the premises located at 5/1, Height Road, Liluah, Howrah, the said appellant is having VAT/CST registration from the Government of West Bengal and they discharge sales tax liability on the final product 'Eagle Brand' Flask as a trader. 6.2. We observe that Notification No. 8/2003-CE dated 01.03.2003 as amended exempts 'branded products' manufactured in rural areas. For ready reference, the relevant para of the said exemption is reproduced below: "4. The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases: - (a) -------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the brand name of 'Eagle' ready for sale emerges at the rural area namely, village Bhattanagar in Anandpur, Liluah.. There is no dispute that this address is a rural area and the branded goods manufactured in this village are exempted from payment of central excise duty. Thus, we observe that the clearance of finished goods bearing the brand name 'Eagle' by the appellant are eligible for the SSI exemption as provided under the notification 8/2003 -CE dated 01.03.2003, as amended. Hence, demand of duty from the appellant for manufacture and sale of branded goods of another person is not sustainable and accordingly, the same is set aside. 6.5. Regarding clubbing of clearances by the Appellant and that of M/s Shanti International, the Adjudicating Authority observes that both the units are operative from the same premises ; they were controlled by one single family; all the production activities were carried out in the premises of one unit and raw materials and packing materials were stored in the other premises and both the units have common office; accordingly, the value of clearances of both the units are clubbed. Regarding the role of M/s Eagle Home Appliance Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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