LAKSHMI PLASTICS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS is an appeal filed by M/s. Lakshmi Plastics Ltd. against O -I -A No. 3/2002, dated 20 -5 -2002 passed by the Commissioner of Customs & Central Excise (Appeals), Hyderabad.

(2.) THE Revenue initiated proceedings against the appellant viz, M/s. Lakshmi Plastics Ltd, for availing of the benefit of Notification No. 01/1993 dated 28 -2 -1993 inspite of the fact that they were using the brand name of M/s. Rump Industries, Nellore. The concerned brand name is 'KUMAR'. The adjudicating authority, after a very detailed examination, came to the conclusion that the brand name 'KUMAR' does not exclusively belong to M/s. Rump Industries, Nellore in view of a Memorandum of Understanding between the appellant and M/s. Rump Industries with regard to the use of the brand name 'KUMAR'. Hence, he dropped the proceedings against the appellants. However, the Revenue filed an appeal to the Commissioner (Appeals), who held in the impugned Order that the brand name 'KUMAR' clearly belongs to M/s. Rump Industries. He set aside the Order of the original authority and allowed the Revenue's appeal by confirming a demand of Rs. 14,36,000/ - under Rule 9(2) of the Central Excise Rules, 1944 read with proviso to Section 11A(1) of the Central Excise Act, 1944. Further, he imposed a penalty of Rs. 5 lakhs on the appellant under Rules 173Q and 226. A Redemption Fine of Rs. 10,000/ - was imposed after confiscating the plant, building, land and machinery. The appellant is aggrieved over the Order of the Commissioner (Appeals) and has come before this Tribunal to set aside the impugned Order.

(3.) THE learned Consultant submitted that when the original authority dropped the proceedings and the appellate authority imposes penalty, there is gross violation of Section 35A(3) as no notice was given to the appellant before enhancement of penalty. He urged that in view of the Memorandum of Understanding dated 31 -3 -1994, all the Members of the erstwhile Rump family are perfectly eligible to use the proper noun 'KUMAR' as their trade name or brand name. Each one of the family members is entitled to use the so called brand name 'KUMAR' in respect of the goods manufactured by them subject to the condition that one does not manufacture the goods which are manufactured by any one of the others. He also relied on the Board's Circular No. 213/41/88 -CX . VI, dated 30 -12 -1988. Under these circumstances, it is not correct to say that the Brand name 'KUMAR' is owned by M/s. Rump Industries.