Custom, Excise & Service Tax Tribunal
M/S. Sunshine Industries vs Commissioner Of Central Excise on 22 August, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Excise Appeal No. 2726, 2727 & 2742 of 2005-EX[DB] Date of Hearing / Decision: 22.08.2013 [Arising out of Order-In-Appeal No. 183 to 186/CE/Appl/ ADC/DLH-I/2004 dated 16.5.2005 passed by Commissioner of Central Excise (Appeals), Delhi ] For approval and signature: Honble Ms. Archana Wadhwa Member (Judicial) Honble Mr. Manmohan Singh Member (Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s. Sunshine Industries Appellant Hindustan Sanitaryware & Indus Ltd. R.S. Sanitaryware Vs. Commissioner of Central Excise, Respondent
Delhi I Appearance:
Shri K.K. Anand, Advocate for the Appellant Shri U K Srivastava, AR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Mr. Manmohan Singh, Member (Technical) ORDER NO . FO/ 57368-57370 /2013-Ex(Br) Per Archana Wadhwa(for the Bench):
All three appeals are being disposed of by a common order as they arise out of the same impugned order passed by lower authorities vide which demand of Rs.10,34,108/- stands confirmed against M/s. Sunshine Industries along with imposition of penalty of identical amount. In addition, penalty of Rs.10,000/- each stand imposed on the other appellants.
2. As per facts on record M/s. Sunshine Industries are engaged in the manufacture of parts of sanitarywares in terms of design and specifications given by their buyers, who are the owner of brand name, which are being specified by the appellants on the said parts. Their factory was visited by DGCI, who found that the appellant was putting the brand name of their buyer on various parts being manufactured by them and as such, benefit of small scale exemption notification being availed by the said appellant, was not available to him. Statements of various persons were recorded, statutory records were scrutinized and on the basis of same, show cause notice was issued, culminating into an adjudication order, confirmed by the appellate authority. Hence, the present appeal.
3. We have heard Shri K K Anand, learned advocate and Shri U K Srivastava, learned DR for the Revenue.
4. The short question required to be decided in the present appeal is as to whether the appellant, who is manufacturing parts of sanitary wares is on behalf of their customers, is entitled to the benefit of small scale exemption or not. Learned advocate has drawn our attention to various decisions of the Tribunal as also to the Boards circular No. 71/71/94-CX dated 27.10.94 clarifying that when such use of brand name is in respect of original equipment parts, which are further used by the other manufacturers, as a part of their final product, the bar of brand name would not be applicable. To the similar effect is Tribunals decision in the case of Telering vs. CCE, Bangalore [2001 (138) ELT 588 (Tri-Del)], Kohinoor Elastic (P) Ltd. vs. CCE, Indore II [ 2001 (136) ELT 1155 (Tri-Del)], S.A. Industries vs. CCE, Mumbai [2000 (121) ELT 393 (Tri)] and Prakash Industries vs. CCE, Bhubaneswar [ 2000 (119) ELT 30 (Tri-LB)].
5. However, learned advocate fairly agrees that the Tribunals decision in the case of Kohinoor Elastic (P) Ltd . and as also Larger Bench decision in the case of Prakash Industries were subsequently reversed by the Honble Supreme Court as reported in [2005 (188) ELT 3 SC].
6. We further note that period involved in the present case is 2001 to February, 2002 and the show cause notice stand issued on 5.7.02. As such, we agree with the learned advocate that when the earlier decision of the Tribunal were in favour of the assessee and there was Boards circular clarifying that in such a scenario the benefit of small scale exemption cannot be denied, there can be any willful mis-statement or malafide suppression on the part of the appellant so as to justify invocation of longer period of limitation. Inasmuch as part of the demand falls within the limitation period, we direct the lower authorities to quantify the demand falling within the limitation period. We also accept the appellants plea that the entire realization during the said period has to be considered as cum duty price and the benefit of the same has to be extended to the appellant. Accordingly original adjudicating authority is further directed to requantify the demand by considering the realization as cum duty.
7. Inasmuch as we have accepted the appellants plea of limitation, on the ground of absence of any malafide, imposition of penalty on all the appellants is not justified. The same is accordingly set aside. All the three appeals are disposed of as above.
(Dictated and pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
( Manmohan Singh ) Member(Technical)
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