REIZ ELECTROCONTROLS PVT LTD Vs. COMMR OF CENTRAL EXCISE
LAWS(SC)-2006-7-50
SUPREME COURT OF INDIA
Decided on July 31,2006

REIZ ELECTROCONTROLS PVT.LTD. Appellant
VERSUS
COMMR. OF CENTRAL EXCISE, DELHI Respondents





Cited Judgements :-

IVRCL INFRASTRUCTURE AND PROJECTS LTD. VS. COMMISSIONER OF CUSTOMS [LAWS(SC)-2015-4-37] [REFERRED TO]
SRINIWAS CABLE COMPONENTS VS. STATE OF MADHYA PRADESH [LAWS(SC)-2012-2-110] [ RELIED ON]
G P CERAMICS PVT LTD VS. COMMISSIONER TRADE TAX UP [LAWS(SC)-2008-11-46] [REFERRED TO]
KISHORBHAI HARJIBHAI PATEL VS. INCOME TAX OFFICER [LAWS(GJH)-2019-7-225] [REFERRED TO]
COMMISSIONER OF INCOME TAX XV VS. BHARTI MISHRA [LAWS(DLH)-2013-12-296] [REFERRED TO]
RIMJHIM STAINLESS LTD VS. STATE OF U P [LAWS(ALL)-2016-5-403] [REFERRED]
BINDU PREMANANDH VS. COMMISSIONER OF INCOME TAX [LAWS(KER)-2022-8-37] [REFERRED TO]
STAR INDUSTRIES VS. COMMISSIONER OF CUSTOMS (IMPORTS) RAIGAD [LAWS(SC)-2015-10-33] [REFERRED TO]


JUDGEMENT

- (1.)Challenge in this appeal is to the decision of the Central Excise and Gold Control Appellate Tribunal, New Delhi (in short 'the Tribunal') holding that the authorities had rightly denied small scale exemption to Reiz Electrocontrols Pvt. Ltd. (in short the 'REPL') and Reiz Enterprises (in short the 'RE'). It was further held that the demands of duty from them and imposition of penalty as well as interest levied under Central Excise Act, 1944 (in short the 'Act') and Central Excise Rules, 1944 (in short the 'Rules') do not suffer from any infirmity. However, the case was remanded to the jurisdictional Commissioner for re-computing the duty demands and redetermining penalty. However, in the light of observations made, penalties imposed on Shri Atul Agarwal and Sh. Siddarth Agarwal under R. 209A were set aside.
(2.)The back ground facts in a nutshell are as follows:
2.1 M/s RE is a proprietary concern of Shri Atul Agarwal and is engaged in the manufacture of Electronic Fan Regulators, Dimmers and Remote Control Switches under the brand name 'RE1Z since 1988. In the year 1993, M/s REPL was constituted with Shri Atul Agarwal and his two brothers Shri Siddarth Agarwal and Shri Ravindra Agarwal as its Directors. M/s REPL was engaged in the manufacture of Electronic transformers. Both the units manufacture their goods under a common brand name of 'REIZ'. The Commissioner, Central Excise-I, New Delhi by his order dated 31.10.2001 held that since the brand name 'REIZ' belonged to M/s RE till its transfer to REPL in 2000, the Electronic transformers manufactured under brand name 'RETZ' by REPL till the transfer were ineligible for small scale exemption, inasmuch as under the Notification no.1/93 a manufacturer affixing the brand name of another person was ineligible for the exemption. Similarly, it was held that M/s RE became ineligible for exemption once the brand name REIZ was transferred on 30.03.2000 to REPL. Appeals were preferred before the Tribunal questioning duty, penalty and interest levied. Tribunal disposed of the appeals as aforenoted. Tribunal noted the position as follows: "It is a specific condition under Notification No. 1/93 that the goods manufactured under the brand name of another person is not eligible for exemption under the notification. Investigations have established that Shri Atul Agarwal on behalf of M/s. RE had applied on 12.01.1993 for registration of brand name of 'REIZ' in respect of goods including electronic transformer. This registration application was allowed in his favour in 2000. It is well settled that registration of trade mark/brand name once granted relates back to the date of application. Thus, in respect of electronic transformer also Mr. Atul Agarwal, proprietor of RE became owner of the brand name 'REIZ' w.e.f 1993. Therefore, the electronic transformers manufactured by M/s. REPL with the brand name REIZ impugned in the present proceeding being manufactured subsequent to 1993 became ineligible for small exemption on account of the use of brand name 'REIZ' which belonged to another person (RE). On account of the subsequent transfer of the brand name of REPL, RE has also become ineligible for exemption in respect of the goods produced under that brand name subsequent to the transfer."

2.2 Stand of the appellants before the Tribunal was that M/s RE never manufactured electronic transformer and therefore, in respect of that item, the brand name REIZ belonged to M/s REPL. It was also submitted that REPL had applied for registration of that brand name in their favour for electronic transformer in 1995. In these circumstances, it has to be held that electronic transformers manufactured by the REPL were not manufactured under the brand name of another person.

2.3 The demands in the present case were raised under extended period permitted in the proviso 11A of the Act, on the ground that, the non-levy in the result of suppression of facts with intention to evade payment of duty. It was contended that there was no suppression of facts in as much as both the manufacturers had filed declaration before the Central Excise authorities that goods are manufactured under the brand name belonging to them and brand name of another person is not used It is also stressed that both the units are located in the same building in the jurisdiction of same Central Excise Superintendent and therefore, the facts of the cases were known to the Central Excise authorities and a change of suppression of facts is not maintainable.

2.4 The respondents pointed out that in view of the specific prescriptions in the Notification the demands have been rightly raised.

2.5 As noted above the contentions did not find acceptance by Tribunal and, therefore, the impugned order was passed.

(3.)Stands before the Tribunal were reiterated by learned counsel for the appellant. Additionally, it was submitted that the appellant had in the meantime obtained a certificate under the Trade Marks Act, 1999 (in short the 'Trade Marks Act') and the certificate of registration of trade mark covered the period in question. Therefore, even if it is conceded that the Tribunal's view is correct no duty, penalty or interest can be levied.


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.