Custom, Excise & Service Tax Tribunal
Cce, Indore (M.P.) vs M/S.Precitex Rubber Components Pvt. ... on 3 September, 2014
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision: 3.9.2014
1
Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
Excise Appeal No. 2964/ 2005
[(Arising out of Order-in-Appeal No.IND-I/158/2005 dated 23.06.2005 passed by the Commissioner of Central Excise (Appeals-I), Customs & Central Excise, Indore (M.P.)]
CCE, Indore (M.P.) Appellants
Vs.
M/s.Precitex Rubber Components Pvt. Ltd. Respondent
Appearance:
Shri M.S. Negi, DR for the appellant / Revenue. Shri Somnath Shukla, Advocate for the respondent. Coram:
Honble Shri G. Raghuram, President Honble Mr. Rakesh Kumar, Technical Member Final Order No. Dated:03.09.2014 Per Rakesh Kumar:
The respondent are manufacturers of Synthetic Rubber Aprons and Cots chargeable to central excise duty. The period of dispute in this case is from March, 1989 to August, 1990. The respondent, during this period, were availing of SSI exemption under notification no.175/86-CE. The departmental officers visited the appellants unit and found that they are using brand name Precitex on their goods and hence, in terms of clause 7 of the exemption notification, they would not be eligible for SSI exemption, as the brand name Precitex belonged to M/s. Precision Rubber Industries Pvt. Ltd. Bombay (hereinafter referred to as PRIPL). It is on this basis that after issue of show cause notice, the Joint Commissioner vide order-in-original dated 23.12.2004 confirmed the duty demand of Rs.15,56,112/- against the respondent and besides this, imposed penalty of Rs.2 Lakhs under Rule 173 Q of the Central Excise Rules, 1944. In course of proceedings before the Joint Commissioner, the respondent pleaded that PRIPL, Bombay is also a SSI unit with SSI registration certificate issued by the Directorate of Industries and is eligible for SSI exemption under notification no.175/86-CE and hence, the use by the Respondent of the brand name Precitex of PRIPL would not debar them from the benefit of the SSI exemption, but this plea was not accepted on the ground that the total value of the clearances of PRIPL was more than Rs. 150 Lakhs. On appeal being filed to the Commissioner (Appeals) against this order of the Joint Commissioner, the Commissioner (Appeals) vide order-in-appeal dated 23.06.2005 set aside the Joint Commissioners order and allowed the appeal on the ground that during the period of dispute, the synthetic rubber aprons and cots being manufactured by PRIPL, Bombay had been classified under sub-heading no.4009.99 where rate of duty is nil and this classification had been affirmed by the Commissioner (Appeals) vide order-in-appeal dated 30.08.91 and that since the goods being manufactured by PRIPL attracted nil rate of duty, the value of the clearances of these goods would not form part of the aggregate value of the clearances during 1987-88 as well as 1989-90 and hence, PRIPL would be eligible for SSI exemption. Against this order of the Commissioner (Appeals), this appeal has been filed by the Revenue.
2. Heard both the sides.
3. Shri M.S. Negi, ld. Departmental Representative, assailed the impugned order by reiterating the grounds of appeal and pleaded that the goods being manufactured by the respondent unit as well as by PRIPL, Bombay- Aprons and cots of rubber are textile machinery, that the Tribunal in respect of the Bangalore Unit of PRIPL vide order-in-appeal dated 9.3.98 had held that the classification of synthetics Aprons and cots has to be made under heading no.84.48, that in view of this, the goods manufactured by PRIPL, Bombay would not be exempted goods and hence, during the period of dispute, PRIPL would not be eligible for SSI exemption and on this basis, the respondent unit using the brand name of PRIPL would not be eligible for SSI exemption. He also pleaded that the finding of the Commissioner (Appeals) that the brand name Precitex used by the respondent is different, as the same is without circle surrounding the brand name Precitex, while the brand name Precitex owned by PRIPL, Bombay is having a circle in the middle of which the word Precitex has been inscribed, and therefore use of the brand name Precitex would not debar the Respondent from the benefit of the SSI exemption, is not correct. Shri Negi further pleaded that use of the brand name Precitex by the respondent unit, even though it is not circumscribed by circle, will debar them from the benefit of SSI exemption, in view of the Apex Courts judgement in the case of CCE, Trichy vs Rukmani Packwell Traders 2004 (165) ELT 481 (SC), that though during the period of dispute, the Bombay Unit was classifying its product under Heading no.4099.99 where rate of duty is nil and this classification has been affirmed by the Commissioner (Appeals), subsequently, the Tribunal in respect of the Bangalore Unit had classified the same product under Heading no.84.48 as textile machinery and hence, the goods manufactured by PRIPL, Bombay cannot be treated as exempted goods and hence, the value of the goods would be includible in the aggregate value of the clearances and on this basis, PRIPL, Bombay would not be eligible for SSI exemption during the period of dispute and for this reason, the respondent unit using their brand name would not be eligible for exemption. He, therefore, pleaded that the impugned order is not correct.
4. Shri Somnath Shukla, Advocate, ld. Counsel for the respondent, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and emphasized that during the period of dispute, in terms of the clause 7 of SSI exemption Notification no.175/86-CE, the benefit of this exemption would be denied to the assessee using the brand name of another manufacturer only if the manufacturer owning the brand name was not eligible for SSI exemption, that in this case, the respondent were using the brand name Precitex of PRIPL, Bombay, that during the period of dispute, PRIPL though registered as small scale industry with the Directorate of Industries, were not availing of SSI exemption, as the goods manufactured by them synthetic rubber Aprons and cots, had been classified by the Asstt. Commissioner under Heading no.4009.99 carrying the nil rate of duty at the relevant time and this classification had been affirmed by the Commissioner (Appeals), as well as by the Tribunal, that in terms of the provisions of the SSI exemption, the value of the goods fully exempt from duty under any other notification was not be included in the aggregate value of clearances during preceding financial year, that on this basis, the aggregate value of the clearances of PRIPL, Bombay during the period of dispute was well within the threshold limit for SSI exemption and hence, the respondent unit could not be denied the benefit of SSI exemption for using the brand name of PRIPL and that the Tribunal in the respondents own case as reported in 2004 (168) ELT 269 (T-M) has held that non-availment of the benefit of SSI exemption by the brand name holder PRIPL would not debar them from the benefit of the SSI exemption. He, therefore, pleaded that there is no infirmity in the impugned order.
5. We have considered the submissions from both the sides and perused the records.
6. One ground on which the Commissioner (Appeals) has allowed the benefit of exemption is that the brand name Precitix being used by the respondent is not inscribed in the circle, while the brand name owned by PRIPL, Bombay is inscribed in the circle. We do not agree with the view of the Commissioner (Appeals), as in view of the Apex Courts decision in the case of Rukmani Packwell Traders (supra), even the use of the brand name by a SSI unit, which is similar to the brand name used by some other person or is a part of the brand name of another person would debar him from the benefit of the SSI exemption. However, during the period of dispute, in a case where a small scale unit used the brand name of another manufacturer, the benefit of SSI exemption could be denied to that unit only if the brand name owner was not eligible for the SSI exemption. In this case, there is no dispute about the fact that the brand name owner M/s PRIPL, Bombay was registered with the Directorate of Industries as a small scale unit. However, during that period, that unit was not availing SSI exemption for the reason that its product had been classified by the Assistant Commissioner under Heading no.4009.99 where rate of duty is nil and this classification has been affirmed by the Commissioner (Appeals) as well as by the Tribunal as a result of which they were not paying any duty. However, for the purpose of SSI exemption to the respondent, what is material is as to whether during that period, the brand name holder (M/s PRIPL) was eligible for SSI exemption. It is not disputed that if as per the provisions of the SSI exemption, the value of the exempted goods is excluded from the aggregate value of the clearances of PRIPL, during each preceding financial year, the same would be well within the exemption limit. Therefore, it cannot be said that, during the period of dispute, the brand name holder, PRIPL was not eligible for SSI exemption and for this reason, it would not correct to deny the benefit of the SSI exemption to the respondent unit. On this point, therefore, we agree with the findings of the Commissioner (Appeals). Though subsequently, the Tribunal in the year 1998 vide order dated 19.3.98 held that the Synthetic Rubber Aprons and Cots are parts of the textile machinery and would be classifiable under Heading No.84.48, in our view, on the basis of this decision, the classification of the goods, during the period of dispute, cannot be revised and it has to be held that during the period of dispute, PRIPL, Bombay were eligible for SSI exemption and hence, use of their brand name Precitex by the respondent unit would not debar them from the benefit of the SSI exemption. We, therefore, do not find any infirmity in the impugned order. The Revenues appeal is dismissed.
[Operative portion already pronounced in the open court] (Justice G. Raghuram) President (Rakesh Kumar) Member (Technical) Ckp.