DUGAR TETENAL INDIA LTD. Vs. CCE

JUDGEMENT

(1.) THE brief facts of the case are as under:

(2.) THE show -cause notice dated 24.6.1992 proposed to recover duty of Rs. 32,25,465/ - from the appellants on the branded goods cleared by them during the period, March 1988 to February 1992. It invoked the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944 for the purpose of the demand of duty, alleging against the party suppression and mis -declaration of facts in classification lists filed under Rule 173B of the CER 1944. The adjudicating authority has found that the appellants had wilfully misstated in their classification lists that they were the owners of the brand name "TETENAL". That authority has further found that the appellants had done so with intent to evade payment of duty by availing the benefit of Exemption Notification No. 175/86 -CE dated 1.3.1986. According to the adjudicating authority, the appellants were fully aware of the fact the brand name was not owned by them and that it was, in fact, owned by their foreign collaborator viz. M/s. Tetenal Vertriebs GmBH of Germany. The adjudicating authority has, therefore, come to the conclusion that the extended period of limitation was invokable against the appellants for recovery of the duty. That authority also held that the appellants were liable to penalty under Rule 173Q of the Central Excise Rules 1944.

(3.) LD . SDR Shri M.D. Singh opposed the above arguments and submitted that the appellants were fully aware of the fact that, during the material period, the brand name 'TETENAL" did not belong to them but belonged to their German collaborator. The appellants suppressed this material fact before the department with intent to evade payment of duty on the branded goods by wrongly availing the benefit of Notification No. 175/86 -CE. Urging us to reject the appellants' plea of bona fide belief, the DR relied on the Tribunal decision in Amco Batteries Ltd. v. CCE, Bangalore [ : 1999 (112) ELT 665 :, 1999 (85) ECR 364 (T)]. He submitted that there was no contemporary material on record to support the said plea. The DR further submitted that the party deliberately withheld from the department the material information that the brand name was their foreign collaborator's property, with intent to avail the benefit of exemption unduly. In this connection, he relied on the Supreme court's decision in Madras Petro -Chem Ltd. v. Collector of Central Excise, Madras [1999 (108) ELT 611 (SC)]. He prayed for rejecting the appeal. In his rejoinder, ld. counsel countered by submitting that the order of the Tribunal in Amco Batteries Ltd. (supra) cited by ld. DR was later recalled. Counsel also relied on the Supreme Court's decision in Pushpam Pharmaceuticals Company v. Collector of Central Excise, Bombay [1995 (78) ELT 401 (SC) :, 1997 (71) ECR 329 (SC)] in support of this contention that the relevant facts were known to both parties and hence there was no warrant for any allegation of suppression of facts against the assessee and for invoking the extended period of limitation for demand of duty.