Customs, Excise and Gold Tribunal - Delhi
Cristopia Energy Systems (I) Pvt. Ltd. vs Commr. Of Cus. & C. Ex., Indore on 24 January, 2002
Equivalent citations: 2002(80)ECC528, 2002(141)ELT533(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. These are two applications for waiver of pre-deposit of amount of duty and penalty as under :
(1) M/s. Cristopia Energy Rs. 39,90,060/- duty
Systems (India) Pvt. Ltd. Rs. 39,90,060/- penalty
(2) Shri C.M. Gupta Rs. 1,00,000 penalty
2. Shri B.L. Narasimhan, Id. Advocate, appearing on behalf of the appellant No. (1) submitted that they manufactured components of energy storage systems bearing the brand name "CRISTOPIA"; that the demand of duty has been made for the period from January, 1997 to June, 2000 on the ground that they were manufacturing the goods bearing the brand name of a foreign Company and accordingly denying them the benefit of SSI Exemption. Ld. Advocate mentioned that for the purpose of stay petition, he is not arguing on the use of brand name; that he will be representing the appeal only on the aspect that the demand is hit by time limit; that the entire demand is based on collaboration agreement entered into by the appellant No. (1) with M/s. Cristopia Energy Systems SA France; that the Central Excise officers have visited their factory premises on 9-12-98 and on the same date itself the collaboration agreement was handed over to them; that the officers had also scrutinized the various documents; that handing over of collaboration agreement is evident from the show cause notice itself which is based on the clauses in the joint venture agreement between the appellant company and the French Company; that accordingly the department cannot claim any suppression with effect from February, 1998 onwards. In this regard, reliance was placed on the decision in the case of Modipon fibre Company v. CCE, Meerut - 2001 (135) E.L.T. 1420 (T) = 2001 (46) RLT 384 (CEGAT)] and SQL Ltd. v. CCE [2000 (39) RLT 811 (CEGAT)]. Ld. DR also mentioned that the SSI Notification was amended in February, 2000 and the new Notification No. 8/2000, dated 1-3-2000 provided in respect of branded goods the benefit of Notification will be available if the goods are manufactured in a factory located in a rural area; that they have submitted a certificate from Gram Panchayat to this effect. Finally, he submitted that in respect of duty payable by them, if any, they would be eligible for the deduction of excise duty not payable from the price charged by them in terms of the decision of the Larger Bench of the Tribunal in the case of Srichakra Tyres v. CCE [1999 (108) E.L.T. 361]; that in addition, they will be eligible for availing of Modvat credit^f the duty paid on the inputs which have gone into in or in relation to the manufacture of the final products.
3. K.K. Anand, Id. Advocate appearing on behalf of the appellant No. 2 submitted that Shri C.M. Gupta, Executive Director is a paid employee of the Company and he is not a person referred to in Rule 209 A of the Central Excise Rules since he is not concerned with transporting, removing, depositing, selling or in any other manner dealing with the excisable goods in question; that the penalty could be imposed under this rule only if the person knows or has reason to believe that goods are liable to confiscation; that he was under the bona fide belief that the brand name belongs to the appellant company and as such no duty was payable by them; that he is under the appellant company and his taxable income is only Rs. 1.7 lakhs per annum.
4. Opposing the prayer Shri R.D. Negi, Id. DR submitted that it is now settled law that the brand name of a foreign company also cannot be affixed on the excisable goods and if the goods are bearing the brand name of foreign goods, the benefit of exemption notification is not available; that both the Applicants had never brought to the notice of the Department the fact that they were using the brand name of a foreign company which is not eligible for the benefit of the Notification; tnat the applicant No. 2 was incharge of the factory as well as authorized signatory for the purpose of Central Excise Act and Rules; that in this capacity he was dealing; that accordingly it cannot be claimed that he was not dealing with the impugned goods. He also relied upon the decision in the case of Sonoma Aeromatics Pvt. Ltd. v. CCE [1995 (78) E.L.T. 285 (Tri.)] and mentioned that in the said case also the as-sessee had suppressed the fact of affixing the brand name of another manufacturer; that the Appeal filed by the assessee against the said decision has been dismissed by the Supreme Court as reported in 1997 (93) E.L.T. A70.
5. We have considered the submissions of both the sides. It has not been controverted by the Revenue that collaboration agreement was given to them in December, 1998 and in view of this fact the applicants have made out a strong prima facie case on ground of non-invokability of extended period of limitation from said date. Moreover, the applicants have also made out a strong prima fade case for availability of the notification in view of the amendment carried out in respect of the goods manufactured under rural areas with effect from February, 2000. Shri B.L. Narasimhan, Id. Advocate submitted that for the period prior to December, 1998, duty liability, if any, will be approximately Rs. 15.94 lakhs. Having gone into all the facts and considerations, we direct the applicant No. (1) to deposit Rs. 15 lakhs towards .duty within eight weeks from today and on complying with this direction, there will be waiver of pre-deposit of the entire amount of penalty on both the applicants and the recovery of the same will remain stayed during the pendency of the appeals. The matters will come up for reporting compliance on 28-3-2002.