Custom, Excise & Service Tax Tribunal
M/S. Sheetal Clothing Co. Pvt. Ltd vs Cce Mumbai I on 24 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/136/06 Mum
Arising out of Order-in-Appeal No. BR (2943)325/MI/2005 dated 20.10.2005 passed by the Commissioner of Central Excise (Appeals),, Mumbai I.
For approval and signature:
Shri. M.V. Ravindran, Member (Judicial)
Shri. P.K.Jain, Member (Technical)
1. Whether Press Reporters may be allowed to see : No
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 : Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
M/s. Sheetal Clothing Co. Pvt. Ltd.,
:
Appellant
Versus
CCE Mumbai I
Respondent
Appearance Shri R.V. Shetty, Advocate for appellant Shri Ashutosh Nath, A.C (A.R.) For Respondent CORAM:
Shri. M.V. Ravindran, Member (Judicial) Shri. P.K.Jain, Member (Technical) Date of Hearing : 24.12.2014 Date of Decision : 24.12.2014 ORDER NO.
Per : M.V. Ravindran This appeal is directed against Order-in-Appeal No. BR (2943)325/MI/2005 dated 20.10.2005.
2. Heard both sides and perused the records.
3. The relevant facts that arise for consideration are that the appellant is engaged in manufacturing of readymade garments. It was noticed by the lower authorities that they were affixing/stitching labels of registered brand Sheetal on the childrens garments purchased from non-duty paying SSI units and cleared the same without payment of Central Excise duty. On conclusion of investigation, show-cause notice was issued to the appellant directing them to show cause as to why duty should not be demanded from them along with interest and also for imposition of penalty. Adjudicating authority confirmed the demands with interest and also imposed penalty; on an appeal, the first appellate authority concurred with the views of the adjudicating authority.
4. The learned Counsel appearing on behalf of the appellant would draw our attention to the facts and take us through the show-cause notice, Order-in-Original and Order-in-Appeal. He would submit that the appellant was not stitching or affixing labels of the registered brand but was affixing price tag, name of the seller of the goods or instructions regarding usage. After taking us through all the relevant statements he would submit that the appellant has already paid off duty liability and the interest thereof. He would submit that there is no reason to visit them with penalty as there is no suppression with intention to evade duty.
5. Learned A.R. on the other hand would submit that the appellant had not declared as they were affixing tag of brand Sheetal. It is his submission that the said brand was not registered in the name of the appellant but was registered with the name of an individual Shri Dhiren B. Shah.
6. On perusal of the records and after giving due consideration to the submissions made by both sides, we find that the appellant has already discharged duty liability and interest thereof before issuance of show-cause notice and during pendency of the proceedings before the lower authorities. We are of the view that the records do not reveal correct position as to whether the appellant has been affixing/stitching the label Sheetal on the childrens garments or on all the garments which were sold/cleared by them. In the absence of any such findings we are unable to go into further details. At the same time it is seen that the appellant has admitted that the brand Sheetal is of Shri Dhiren B. Shah hence should have sought clarification from department as to correct position of law. Be that it may, we uphold the duty liability and the interest thereof as there is no serious contest.
6.1 This takes to the penalty imposed on the appellant under the provisions of Section 11AC of the Central Excise Act, 1944. The entire findings of the lower authorities are that the appellant had suppressed the fact of affixing of label Sheetal and did not inform the department. We find that the argument of the learned Counsel that as the appellant was under the impression that the brand name Sheetal being their own brand name, they were having a bonafide belief as they are covered under the provisions of Notification 38/2003-CE dated 30.04.2003 as having strong force. We perused the said Notification and most specifically the Entry No.50. We find that the entry talks about rate of duty on article of apparel or clothing accessories when subjected to any one or more of the processes like labeling or re-labeling, attaching or affixing price tag, name of seller of such goods or instruction regarding usage. We find that the appellant could have entertained a bonafide belief that the brand Sheetal being their own; as it is undisputed that Shri Dhiren B. Shah was the Director of the Company, and the brand was registered in his name and the appellant has also made an application with the Trade Mark authorities to register the brand in their name; and they did not pay excise duty as they were only affixing label of a seller. Since there could be confusion on this issue and the period involved in this case being the time when these provisions were introduced for the first time we find the appellants submission of there being no intention to evade duty has a strong force. Escapement of duty, if any, in the facts and circumstances of this case, may be due to bonafide belief of the appellant of interpretation of Notification 38/2003-CE. On this ground, we set aside the penalty imposed on the appellant in this appeal and to the extent the appeal is allowed and impugned order is modified.
7. The appeal is rejected to the extent contesting the duty liability and interest thereof and is allowed to that extent contesting penalty imposed on the appellant.
(Dictated in open Court) (P.K.Jain) Member (Technical) (M.V. Ravindran) Member (Judicial) nsk ??
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