NULON INDIA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants in this appeal are M/s. Nulon India Ltd., in which name they claim. to have been incorporated on 24 -9 -87. During the period, September, 89 to June, 94, they had manufactured and cleared, without payment of duty, their products viz. engine treatment additive, differential gear treatment additive, PTFE -based grease and engine coolant, all branded "NULON". The clearance of the products without payment of duty was made under a claim that the goods were classifiable under Chapter 27 of the Central Excise Tariff Schedule as lubricating oils and greases, for which exemption from duty was available under Notification No. 120/84 -C.E., dated 11 -5 -84. After investigations conducted through Preventive Officers of Central Excise, the department classified the products under Chapter 38 of the Central Excise Tariff Schedule and found that the goods were not covered under Notification No. 120/84 -C.E. and further that the benefit of SSI exemption under Notification Nos. 175/86 -C.E., dated 1 -3 -86 and 1/93 -C.E., dated 28 -2 -93 were also not available to the goods as those were cleared under a brand name (NULON) of another person who was not entitled to the benefit of the Notifications. On the basis of these findings, the department framed a case of evasion of duty against the party and issued show -cause notice dated 4 -10 -94 to them invoking the extended period of limitation prescribed under the proviso to Section 11A(1) of the Central Excise Act, 1944. The show -cause notice, which classified the goods under Chapter 38, proposed to recover duty on the same (cleared during the aforesaid period) by denying the benefit of exemption under Notifications 175/86 -C.E. and 1/93 -C.E. on the ground that the goods had been cleared under a brand name which belonged to a foreign company viz. M/s. Nulon Products (Australia) Pty. Ltd. The notice also proposed to impose penalty on the appellant -company and two of its functionaries. The show -cause notice was contested. In adjudicating of the dispute, the jurisdictional Commissioner passed order dated 15 -9 -95, holding the classification of the goods under Chapter 38 and denying the benefit of the above Notifications to the party, ordering confiscation of the seized goods (which had been provisionally released to the appellant -company upon production, by them, of B -11 bond and a cash security of Rs. 1,94,700/ - under Rule 206 with option for redemption thereof on payment of a fine of Rs. 1,94,700/ -, appropriating the said cash security amount towards the redemption fine, and imposing a penalty of Rs. 2,00,000/ - on the company. The adjudicating authority also confirmed demand of duty on the subject goods to such extent as would be worked out by the jurisdictional Asstt. Commissioner. Aggrieved by the order of the Commissioner, the party preferred appeal to this Tribunal. The Tribunal, by Final Order No. 301/97 -C, dated 30 -5 -97 [reported in : 1997 (96) E.L.T. 668] upheld the classification of the products proposed by the department, approved the invocation of the extended period of limitation for demand of duty on engine coolant but disapproved it in respect of duty on the other products, set aside the appropriation of cash security, reduced the penalty to Rs. 50,000/ - and remanded the matter to the jurisdictional Commissioner for examining the question whether the benefit of SSI exemption was available to the appellants in view of the decision of the Calcutta High Court in CCE v. ESBI Transmission Pvt. Ltd. [ : 1997 (91) E.L.T. 292 (Calcutta)] as also for re -determining of the quantity and value of the seized goods. Pursuant to the remand order, the jurisdictional Commissioner passed order dated 24 -1 -2000 denying the benefit of Notifications 175/86 -C.E. and 1/93 -C.E. to the appellants in relation to the branded goods in question and appropriating the cash security of Rs. 1,94,700/ - towards the redemption fine imposed in lieu of confiscation of the good. The present appeal is against this decision of the Commissioner.

(2.) WE have examined the records and heard both sides.

(3.) LD . SDR, Shri M.D. Singh submitted that there was no evidence that the appellants had applied for registration of "NULON" in their own name. He submitted that the registration certificate produced by the appellants stood in the name of Shri L.K. Bajoria, who was only one of the directors of the appellant -company. The appellant -company was an independent juridical person and was competent to have the brand name registered in its own name. But it never did so. Shri L.K. Bajoria was a different person and the registration of the brand name in his name could not be treated as registration thereof in the name of the appellant -company. It thus followed that the goods manufactured and cleared by the appellant -company during the relevant period were affixed with the brand name of another person, who never claimed that he was eligible for the benefit of the subject Notifications. Ld. SDR also contested the Counsel's submission that the appellant -company was the successor -in -interest of M/s. Hitech International Pvt. Ltd. Even if it be assumed that the brand name originally stood in the name of M/s. Hitech International Pvt. Ltd., it could not be treated as brand name owned by the appellant -company in the absence of evidence to show that the appellant -company was successor -in -interest of M/s. Hitech International Pvt. Ltd. Ld. SDR submitted that there was no evidence to substantiate the appellants' claim that the brand name belonged to the appellant -company during the material period. Their claim of exemption from duty under Notifications 175/86 -C.E. and 1/93 -C.E. was hit by the bar provided, respectively, in para -7 and para -4 thereof. Therefore, according to ld. DR, the appellants were liable to pay the duty demanded on the goods in question. He also endeavoured to defend the Commissioner's order of appropriation of cash security towards redemption fine, by submitting that the Commissioner was within his right to do so in terms of the Tribunal's remand order.