S.A. INDUSTRIES Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) IN these two appeals arising out of common Order No. 60/91 dated 29 -6 -1991, passed by the Additional Collector, Central Excise, the issue involved is whether the benefit of Notification No. 175/86 -C.E., dated 1 -3 -1986 is available to the Excisable goods manufactured by M/s. S.A. Industries, Appellant No. 1.

(2.) SHRI C. Harishankar, ld. Advocate, submitted that M/s. S.A. Industries manufacture moulded articles of plastics like Textiles Bobbins, T.V. and Radio Parts, Trays and Containers etc; that they are Supplying Colour T.V. Back Covers and embossed with marking "CROMA COLOUR CC" to M/s. TV and Components Ltd., Appellant No. 2, who were using the same in manufacturing their TV Sets; that Textile Bobbins bearing brand name 'Garden' was supplied by them to M/s. Garden Silk Mills through M/s. Honest Sales Agency; that they also supply textile Bobbins with brand name 'Honest' mentioned thereon to M/s. Honest Sales Agency; that the Additional Collector confirmed the demand of Central Excise duty holding that the Appellants No. 1, were affixing the excisable goods with brand name 'Garden', and CROMA COLOUR CC and as such were ineligible for the benefit of the Small Scale exemption under Notification No. 175/86. The ld. Advocate submitted that CROMA Colour CC is not the brand name; that the brand name is 'Crown' and the words 'CROMA COLOUR CC are embossed to indicate Colour T.V. made by Appellant No. 2 which can be considered as Model No.; that even if it is considered to be a brand name, the mischief of paragraph 7 of Notification 175/86 will not be attracted as T.V. back covers are not sold by the Appellant No. 2 as these are used by them in the manufacture of T.V. Sets; that similarly a textile Bobbins with the brand name 'Garden' are not sold by the brand name owner, Garden Silk Mills in the course of trade but these are used for winding of yarn thereon. He further, submitted that the issue involved in the present matters has been settled by the Larger Bench of the Appellate Tribunal in the case of Prakash Industries v. CCE, Bhubneswar, 2000 (38) RLT 953 wherein it was held that if the branded' goods are only supplied to the Customers and not traded in the market, the use of the brand name is not in the "course of trade" and it would not amount to using brand name so as to deny the benefit of Notification 175/86. The ld. Advocate also mentioned that the decision in the case of CCE v. Wood's Glamour, 1991 (54) E.L.T. 153 (T) was not correct. In respect of embossed words Honest on Bobbins, the ld. Advocate submitted that the Additional Commissioner has not given any findings on this allegation in the Adjudication Order passed by him.

(3.) FINALLY he submitted that major part of the demand is hit by the time limit as specified in Section 11A of the Central Excise Act as the showcause notice was issued on 30 -11 -1990 for demanding the duty for the period from 1 -10 -1987 to 12 -6 -1990. He mentioned that while considering the imposition of penalty, the Additional Collector herself gave the findings that "the Notification 175/86 is not crystal clear on what has to be excluded from exemption". He contended that once the Additional Collector gives the findings that the Notification was not Crystal clear the allegation of suppression of facts cannot be levelled against them in view of the decision of the Supreme Court in the case of Padmini Products v. CCE, 1989 (43) E.L.T. 195 (S.C); wherein it was held that mere failure or negligence on the part of the manufacture in not taking out the licence in case where there was the scope for doubt as to whether licence was required to be taken out or where there was scope for doubt whether goods were dutiable would not attract Section HA of the Act.