LAKHANPAL LIMITED. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants manufacture Portable Torches under the Brand name "NOVINO". M/s. Lakhanpal National Ltd. (LNL) are the owners of the Brand name. The appellants are required to pay royalty @ 2.5% to LNL. About 50% of the impugned goods are sold by the appellants themselves and another 50% is sold by the appellants through LNL. The sale of the Novino torches is effected by the appellants in half of the country and LNL sells Novino torches in other half of the country. The MRP for the torches is the same for the consumers through out the country.

(2.) FOR Excise Duty purpose, the appellants have shown much lower value for their sale to LNL compared to the price at which they themselves are paying duty for transfer of the torches to their own Depots, for subsequent retail sale. The Adjudicating Commissioner has ordered assessment of sales to LNL at the same price at which the appellants themselves have cleared the impugned goods for transfer to their own depot. The appellants are in appeal before us against this impugned order. The adjudicating Commissioner has also ordered payment of interest under Section 11AB on duty demand of Rs. 23,86,944/ -confirmed by him. In addition, he has imposed an equal amount of penalty apart from ordering confiscation of land, building, plant, machinery etc. allowing redemption of the same on fire of Rs. 5,00,000/ -.

(3.) SHRI Madhur Baya, learned Advocate appearing for the appellants states that LNL can not be considered as a related person of the appellants and royalty is not required to be included in the assessable value of the goods cleared to the Brand name owner. In support of his arguments, he relies upon the following decisions: