Case: Commissioner of Central Excise Vs. M/s. Tubes &amp; Structurals &amp; Another

1. These appeals are preferred by the Commissioner of Central Excise, Jamshedpur (hereinafter referred as `the Revenue) questioning the validity of judgment and final order dated 18.2.2003 passed by the Customs, Excise Gold (Control) appellate Tribunal, Kolkata, (hereinafter referred as `the CEGAT). By the judgment the CEGAT has allowed the appeal of the respondent herein and set aside theOriginal passed by the Commissioner Excise levying the excise duty in the sum of LPenalty of an identical amount is also imposed under the provisions of Sec. 11A (C) of the Central Excise Act. Penalty of L 8.50 lakhs was imposed under Rule 173Q of the Central Excise Signature Not Verified Rules, 1944 with further penalty of L 3.50 lakhs on the partner of theConsequently, these penalties have also been set aside.The relevant facts which are to be taken note of for this purpose are that M/s. Tata Iron and Steel Company Ltd. (TISCO) has given authorisation to the respondent vide the letter dated 9.1.2001 to manufacture TISCOG. This letter not only gives authorisation to the respondent to manufacture the goods i.e. Steel Cog Stool as per the TISCO patent design but also gives right to the respondent to market the said goods. Armed with the aforesaid authorisation the respondent has been receiving orders from various parties to manufacture and supply it to them the Steel Cog Stools with the patent design for which authorisation is given by TISCO Ltd.5. The respondent did not pay any excise duty on the premise that it was entitled to the exemption under the aforesaid Notification. When the show cause notice was issued to the respondent to pay the excise duty, defence of the respondent was that the respondent was not affixing the said brand name TISCOG on the goods which were supplied by respondent to the parties from which he received the orders. It was stated that such a name was mentioned only in the invoices which were raised by the respondent. As mentioned above, this contention was not accepted by the Commissioner in his order.6. However, in appeal filed before the CEGAT, CEGAT has accepted the aforesaid plea of the respondent resulting into the quashing of the impugned demand as well as the penalties.

Court's reasoning:
9. It becomes clear from the reading of the aforesaid paras that amendment in para 4 in the manner mentioned above was brought to deny the benefit of Notification to those SSI units which have been making use of branded good for another person irrespective of whether the brand name owner himself is SSI unit or not. It was also made abundantly clear here that the requirement of affixation or brand name by the SSI unit was immaterial. That was the purpose for substituting the word "affixing" by the word "bearing". Going by the aforesaid consideration this Court held in Australian Foods (India) (P) Ltd. case that after this amendment in para 4 it was not necessary that there has to be affixation of the name or mark on the goods.10. Applying the ratio of this case to the facts of the present case, the irresistible conclusion is to hold that the impugned order of the CEGAT is untenable and not in accordance with law. We may mention that while giving its decision the CEGAT has gone by the unamended para 4 without taking into consideration the amended para and the implication thereof.11. At this stage we would like to deal with another contention of the learned counsel for the respondent. He submits that even if the demand of duty is to be upheld, it is not a case where the Revenue Authorities could have imposed penalty under the provisions of Sec.11A(C) of the Act. For this purpose he has drawn our attention to various orders passed by the Tribunal, even after amendment in para 4, taking the view that unless there is affixation of the brand name on the goods itself, a small scale industry would be entitled to the benefit of the aforesaid Notification. He has also referred the judgment of this Court in Commissioner of Central Excise, Jamshedpur v. Superex Industries, Bihar (2005) 4 SCC 207 wherein similar order passed by the Tribunal was upheld by this Court, albeit keeping in view the provisions of the unamended para 4.12. In view of the aforesaid, we are of the opinion that theof duty by the respondent was bona fide act, having nurtured a belief that it was not liable to pay the excise duty on the goods. We, thus, find force in this submission of the learned counsel for the respondent. Therefore, while setting aside the order of the Tribunal, we restore the order of the Commissioner only insofar as it pertains to imposition of excise duty in the sum of L 34,67,164/and set aside the penalties imposed in the said order.This issue, on the facts of the present case as noted above, is not more than res integra and has been settled by few judgments of this Court. It is not necessary to refer to all those judgments. Our purpose would be served in mentioning the judgment titled Commissioner of Central Excise,v. Australian Foods India (P) Ltd. (2013) 287 E.L.T. 385 (SC). In the said case the Court took note of the original para 4 in Notification No.1/93 dated 28.2.1993 where the words mentioned are "the exemption contained in this Notification shall not apply to the specified goods, bearing a brand name or trade name (registered or not) of another person."