Full Judgment
Benefit as SSI unit was availed of by appellants in relation to the goods cleared during the period from February 1990 to 1st June 1991. As a result of their having availed the benefit as a SSI unit, the duty evaded was found to be Rs. 9,39,953/-. As a result of this finding, penalty of Rs. 10,000/- was imposed on the manufacturer company and a penalty of Rs. 5,000/- on Shri Sudhir Bakshi partner, invoking the provisions contained in Rule 209A of the Central Excise Rules, 1944.
2. Learned Counsel representing the appellant advanced an argument that the company produced affidavit from the manufacturers of bags to show that the brand name 'Kemolit S-3' was not affixed in bags. Therefore, according to him, the adjudicating authority was clearly in error in coming to the conclusion that the goods were cleared with a brand name.
We are not impressed with this argument for the simple reason that even without the manufacturer of the bag having the name printed on the bag, the name could be affixed on the bag subsequent to its receipt by the manufacturer, appellants herein.
3. The adjudicating authority dealt with the issue regarding the brand name affixed in the bags in paragraph 9 and 10 of the order impugned in these appeals. They read as follows :- "9. The contention that vide Tariff Advice No. 33/84, dated 16th July, 1984 the Board had taken a view that Kemolit is an alternative name of processed Wollastonite Powder is not correct. The Board was only examining the excisability of various processed items from Calcite Wollastonite lumps. It was only in this context that they referred to various varieties of Kemolit.
10. The contention of the assessee that they have never mentioned the word Kemolit on HDPE bags in which Wollastonite Powder was sold is not correct and is not tenable. Shri Shailendra Baxi Authorised Signatory of the assessee unit, has stated in his statement dated 15-4-1992 that their factory was started with effect from February, 1990 and they had been affixing the brand 'Kemolit S-3' on their products of Wollastonitek Powder during February, 1990 to 1st June, 1991. They had stopped affixing the said brand name after 1st June, 1991 on their product as per direction received from their Head Office at Udaipur. Further the private direction slips bearing No. 90, dated 8-6-1991 and No. 100 dated 20-6-1991 recovered from the factory premises, in which clear direction were given from the Head Office of the assessee located at Udaipur, that the Kemolit is not to be written on bags. Therefore, the statement of Shri Shailendra Baxi and Slips No. 90 to 100 are admissible evidence in the case." From the above it is clear that Shri Shailendra Baxi stated that they were affixing the brand name 'Kemolit S-3' on their products upto 1st June, 1991. He went on to state that they stopped this practice of affixing brand name with effect from 1-6-1991. From the factory of the appellants direction slip bearing Nos. 90 and 100 issued by their Head Office were recovered. Those slips contained instruction to the manufacturing unit to discontinue from writing 'Kemolit S-3' on the bags in which the goods were packed. The presence of these slips prove beyond any doubt that a direction was given by the Head Office to discontinue the earlier practice of affixing brand trade mark/brand name of Kemolit S-3. If there existed no such practice, no slip or instruction would have been issued from the Head Office to discontinue the practice. The period with which we are concerned in these appeals is prior to 1-6-1991, that is, for the period during which the brand name was written on the container. No proceedings have been initiated by the Department for the subsequent period when they discontinued the practice of affixing brand name. Viewed in this light, we find no fault with the conclusion reached by the Collector in the order impugned in these appeals. Appeals are accordingly dismissed. Order passed by the Collector is confirmed.