Full Judgment
2. The appellants are engaged in the manufacture of flat knitting machines. Being a SSI unit, they had been availing SSI exemption under Notification No. 1/93-C.E., dated 28-2-93 as amended and subsequent SSI Notifications including No. 8/98-C.E., dated 2-6-98. But they were found using the brand name "ELEX" on those machines which belonged to M/s. Elex Engineering Works and as such they were not entitled to avail the benefit of SSI notifications. The goods lying in the factory were seized by the Officers. They were, accordingly, served with two show cause notices, one raising the duty demand of Rs. 79,956/- for the period 1-4-98 to 16-9-98 and imposition of penalty and another proposing confiscation of goods, imposition of penalty. After getting their reply, the Adjudicating Authority, confirmed the demand of duty and imposed equal amount of penalty payable with interest and also imposed separate penalty on Shri Jatinder Singh, Proprietor of the appellant's firm as detailed in the Order-in-Original, dated 27-3-2002.
The adjudicating authority also ordered confiscation of goods, imposed redemption fine as well as penalty vide order, dated 30-4-2002 as detailed therein. The said orders have been affirmed by the Commissioner (Appeals).
4. The benefit of the SSI exemption Notifications including No.1/93-C.E. and 8/98-CE had been denied to the appellants solely on the ground that they had manufactured and cleared the goods (flats knitting machines) under the brand name "ELEX" which belonged to M/s. ELEX Engineering Works. But on the record, excepting the bald testimony of Shri Jatinder Singh, Proprietor of the appellant's firm, which too was retracted by him later on, there is no oral or documentary evidence to substantiate this ground. We find from the record that he in his statement recorded on 16-9-98, did not deny the use of the brand name "ELEX" on the semi and fully automatic knitting machines. He also allegedly did not dispute that the said brand name belonged to M/s.
Elex Engineering Works. But this statement was retracted by him and subsequently his statement was again recorded by the Officers wherein he denied the use of said brand name on the machines. He explained the circumstances and state of confusion under which he made earlier statement. Therefore, his earlier statement which stood retracted could not be taken as substantial piece of evidence for bringing home the allegations of having used the brand name of another person as set out in the show cause notice. Rather his statement was to be taken only as light weight piece of evidence needing independent corroboration before relying upon the same, in view of the ratio of law laid down in Manindra Chandra Dey v. CEGAT, 1992 (58) E.L.T. 192 wherein it has been so observed regarding confessional statement, by the Hon'ble Calcutta High Court.
5. We do not find any oral or documentary evidence on the record lending corroboration to the retracted confessional statement of Shri Jatinder Singh, Proprietor of the appellant's firm. There is no material on record to suggest if any enquiry was conducted from the buyers to whom the machines were sold by the appellants, in order to ascertain that those machines carried brand name "ELEX". Rather, the Appellants had brought on record the certificates issued by their various buyers of the machines, namely, Angles Knitwears, Surbhi Fabrics, PEE JAY Apparels (P) Ltd., State Hosiery & Factory, Mod Style Hosiery Mills, Trimurti Knitting Works R. Nagpal Knitwear, and Combined Brothers, wherein they all had given the details of the invoice numbers vide which they purchased the machines from the appellants and categorically stated that no brand name "ELEX" was embossed on those machines. There is no material on record to suggest that any of these certificates issued by the above said firms, on enquiry, was found to be fictitious and factually incorrect. No statement of any Proprietor/Partner of these firms was recorded. Therefore, the certificates issued by all these firms could not be brushed aside by the authorities below. In the face of this evidence, the retracted alleged confessional statement of Shri Jatinder Singh, Proprietor of the appellant's firm could not be given much credence. The authorities below have wrongly accepted the said statement of Shri Jatinder Singh as substantial evidence.
6. Apart from this, even otherwise legally it cannot be concluded that the appellants were using the brand name of another person. The brand name "ELEX", according to the Department belonged to M/s. Elex Engineering Works. But Shri Jatinder Singh who is the proprietor of the appellant's firm, is one of the partners in that firm. Being co-owner of the brand name in the above said firm, he could not be said to had used the brand name of another person, in the manufacture and clearance of the goods by him in his individual capacity. He cannot be legally said to be running another firm of M/s. Elex Industries, as single person cannot constitute any firm under the law. Therefore, being already co-owner of the brand name, he was competent to use the same.
7. In light of the discussion made above, neither the benefit of SSI exemption Notifications including No. 1/93-C.E. and 8/98-C.E., dated 2-6-1998 could not be legally denied to the appellants nor the confiscation of the goods could be ordered. Therefore, the impugned Orders of the Commissioner (Appeals), in both the appeals are set aside. The appeals of the Appellants are allowed with consequential relief, if any, permissible under the law.