Judgment:
1. All the appeals filed by the Revenue are being disposed off by a common order as they are directed against the same order of Commissioner (Appeals) vide which he has set aside the demand against the respondents and penalties imposed upon them by holding the same as barred by limitation, though on merits, he has held against the respondents.
2. After hearing both the sides, it is seen that show cause notice dated 8-4-99 raising demands of duty against the respondents in respect of P.D. Pumps manufactured and cleared by them during the period 1994 to 1998 on the alleged ground that they were using the brand name 'Rotodel' belonging to DEL and as such, were not entitled to the benefit of small scale notification exemption. The notice invoked the longer period of limitation. The same was adjudicated by the Additional commissioner confirming demand of duties and imposing penalties. On appeal against the same, Commissioner (Appeals) upheld the demand on merits but held in favour of the respondents on the point of limitation. Hence the present appeals by Revenue.
3. Commissioner (Appeals) has set aside the demand as time barred by observing as under: Both FSI and ROTODEL have vociferously protested against invocation of extended period by adjudicating authority which confirming the demand. In order to plead that all of their activities right from manufacture to clearance were within the knowledge of department and hence, the recourse to the Section 11A proviso is not tenable in the eyes of law, they have produced copies of 173B declarations bearing verification report by the Range Superintendent in terms of Board's instructions per Circular No. 124/35/95-CX dated 10-5-1995, RT-12 returns for the period in dispute, invoices that were submitted along with these returns, remarks made by Central Excise Officers in testimony of their having conducted audit of the records and registers including RG-1 register maintained by them from time to time. I have already discussed that this case is based not on seizure but on statement and records that were recovered from FSI and ROTODEL during search and subsequent investigation. In order to quantify removals under other's brand name, the entire demand is worked out while relying upon the Rule 52 invoices that were issued by FSI and ROTODEL. While the demand on goods removed as free replacement is based on entries made in a private diary that was recovered during the search operation. No invoices were issued while extending free replacements, as admitted by Shri Niranjan Deliwala.
Upon perusing the fine print of show cause notice, it is seen that both FSI and ROTODEL are charged with suppressing the fact of using others brand name in their invoices, statutory returns as well as classification declarations filed under Rule 173B of Central Excise Rules, 1944. It is however amazing to note that the entire demand is worked out by resorting to the copies of invoices that were submitted by the appellants along with their RT-12 returns from time to time. That such RT-12 returns were positively filed is evident from the dated acknowledgements and concerned Range authorities. It can be seen from these invoices that they were issued in connection with 'ROTODEL' brand goods. Since these invoices were regularly filed with RT-12 returns with department, the allegation of suppression on this count is not well-founded. Similarly, the appellants have argued by way of placing reliance on Tribunal's decision in Intercity Cable System Pvt. Ltd. 1995 (80) EKT 445 that they were under no obligation to declare the trade name or brand name affixed by them on their goods in terms of Rule 173B and hence, the charge of suppression vis-is their 173B declaration is not sustainable. They have also placed on record Range Superintendent's certificate in testimony of his having conducted a satisfactory verification of the description of products declared by them in their declaration, its manufacturing process as also the correctness of the classification and applicability of exemption notification(s) sought to be claimed by the appellants. In this regard, even if it is assumed that the appellants had suppressed the factum of their engagement in affixation of others brand name on the products declared in 173B declaration the certificated issued post-visit of their unit endorsing their eligibility to SSI-based exemption notification supports their contention that wrong doing on their part, if any was within the knowledge of department. By the same token, it is difficult to digest how all these declarations, RT-12 returns and the statutory invoices clearly notifying clearances of 'ROTODEL' brand goods failed to catch the eye of audit groups who, as can be gathered form their endorsements, conducted test checks of these units on a periodical basis. On account of all these reasons, there remains no vindication for application of the proviso to Section 11A that permits demand of duty over and above the normal period of six months. The impugned order does not explain how department could still remain oblivious of the glaring evidences which the aforesaid tools display and despite the fact that department come across them on more than occasions, the lower authority found it apt to saddle the appellants with the extended liability. In the result, I hold that demand on this count is clearly hit by limitation and turns infructuous accordingly.
4. As against above, Revenue has contended that the fact of using brand name was not declared in classification list filed under Rule 173B. In fact, they have specifically declared in the declaration attached with 173B classification list that they are not using anybody's brand name.
As such, it has been argued before us that it is a clear case of mis-statement thus, justifying invocation of longer period of limitation.
5. After carefully considering the submissions from both the sides, it is seen that there is no rebuttal to the factual position, as discussed by Commissioner (Appeals) as regards filing of invoices, RT-12 returns, approval of classification list, verification by the Supdt. And certificate of the jurisdictional central excise officer, audit conducted by audit parties. In fact, it is not denied that the entire case of the department is based upon the scrutiny of the invoices raised by the appellant and filed with the department. All the three units are located under the jurisdiction of the same Superintendent and the invoices were being filed with the RT-12 returns with the same officers. As such, in these circumstances, it cannot be concluded that there was any intention on the part of the respondents to mis-declare or mis-state any vital information. The appellants have also explained that they were under the belief that they are entitled to use the brand name in question and in fact, still maintain the same. It was under this bona fide belief that declaration was made to that effect. Had there been any mala fide on their part, they would not have reflected the fact of use of 'brand name' in their invoices, which they have submitted to the department.
It is well stated law that it is not only the fact of mis-statement simplication which can be made the basis for invocation of longer period of limitation but the mis-statement must be with intention to evade payment of duty. If there would have been any intention on part of the assessee to suppress the use of brand name on their products, they would not have reflected the same in the invoices filed with the department. As such, the element of mala fide intention is definitely missing.
Apart from above, all the statutory records including the classification list were scrutinized and audited, as found by the appellate authority. Learned Advocate for the respondents have relied upon No. of decisions of the Tribunal laying down that in such circumstances, longer period is not applicable.
6. In view of the foregoing discussion, we find no infirmity in the order of Commissioner (Appeals) and, accordingly, reject the appeal filed by Revenue.