GREEN MALLEABLES PVT. LTD. Vs. CCE
LAWS(CE)-2015-1-52
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 14,2015

Green Malleables Pvt. Ltd. Appellant
VERSUS
CCE Respondents

JUDGEMENT

Rakesh Kumar, Member (T) - (1.)THE facts leading to filing of these two appeals are, in brief, as under.
1.1 M/s. Green Malleables Pvt. Ltd. are a manufacturer of pipe fittings. M/s. Green Marketers Ltd. is a group company engaged in trading activity which was purchasing the pipe fittings manufactured by M/s. Green Malleables and beside this, was also purchasing the pipe fittings manufacture by another group company M/s. Green Engineering Corporation and other manufacturers. The period of dispute in this case is from January 2000 to 23/05/2000. During this period, the brand name NN was owned by M/s. Green Engineering Corporation and w.e.f. 24/05/2000 M/s. Green Malleables Pvt. Ltd. became the owner of the brand and started using the same on the goods manufactured by them. The Department's allegation is that during the period prior to 24/05/2000 i.e. during period from January 2000 to 23/05/2000, when the brand name NN was owned by M/s. Green Engineering Corporation and as such M/s. Green Malleables were not the owner of this brand name, the same was being used by M/s. Green Malleables on the goods manufactured by them and, hence, in respect of such goods, M/s. Green Malleables Pvt. Ltd. would not be eligible for SSI exemption. Since for the period from January 2000 to 23/05/2000, it is alleged that M/s. Green Malleables Pvt. Ltd. cleared the goods bearing brand name NN without payment of duty by wrongly utilising the SSI exemption, to M/s. Green Marketers and other dealers, in addition to demand of duty from M/s. Green Malleables, it is also proposed to impose penalty on M/s. Green Marketers. It is on this basis that the Additional Commissioner vide order -in -original dated 25/02/04 confirmed the duty demand of Rs. 7,50,832/ - against M/s. Green Malleables alongwith interest thereon under Section 11AB and beside this, while imposed penalty of equal amount on M/s. Green Malleables under Section 11AC and another penalty of Rs. 50,000/ - on them under Rule 9(2) and Rule 173Q of the Central Excise Act, 1944, imposed penalty of Rs. 1,00,000/ - on M/s. Green Marketers under Rule 209A of Central Excise Rules, 2004. On appeals being filed against this order of the Additional Commissioner, the Commissioner (Appeals) vide order -in -appeal dated 29/04/05 reduced the duty demand against M/s. Green Malleables to Rs. 6,47,269/ - alongwith interest and also reduced the penalty under Section 11AC to the same amount. The penalty on M/s. Green Marketers was also reduced to Rs. 50,000/ -. Against this order of the Commissioner (Appeals), these two appeals have been filed by M/s. Green Malleables and M/s. Green Marketers.

(2.)HEARD both the sides.
Shri Sudhir Malhotra, Advocate, the learned Counsel for the appellant, pleaded that the duty demand is for the period from January 2000 to 23/05/2000 in respect of the goods manufactured and cleared by M/s. Green Malleables to M/s. Green Marketers and to other dealers, that during this period, the appellant were availing the SSI exemption, that during the period prior to 24/05/2000, the brand name NN belonged to M/s. Green Engineering Corporation and during that period M/s. Green Malleables were not using this brand name on their goods, that M/s. Green Malleables started using the brand name NN only from 24/05/2000 when they became the owner of this brand, that the duty demand against M/s. Green Malleables is based on the allegation that during the period from January 2000 to 23/05/2000, M/s. Green Malleables were using the brand name NN on their goods, while this brand name during that period belonged to M/s. Green Engineering Corporation, that this allegation of the Department is based on the statements of certain dealers, that the sales were to 39 dealers out of which 10 to 12 dealers have stated that during the period of dispute they had purchased the goods bearing brand name NN from M/s. Green Malleables, that the appellant had requested for cross examination of those dealers but the same was not allowed, that the cross examination of the persons whose statement is relied upon for proving the allegation of duty evasion against an assessee is mandatory in terms of the provisions of Sub -section (2) of Section 9D read with Sub -section (1) of that Section, that since the statement of the dealers is the only the evidence in support of the Department's allegation of M/s. Green Malleables using the brand name NN on their goods during the period of dispute, without permitting cross examination of those persons the duty demand cannot be confirmed, that when duty demand against M/s. Green Malleables is not sustainable, there is no question of imposition of penalty on them under Section 11AC or on M/s. Green Marketers under Rule 209A of the Central Excise Rule, 1944, and that in view of this, the impugned order is not correct.

(3.)SHRI Govind Dixit, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that the dealers who have stated that during the period of dispute they were purchasing the pipe fittings bearing the brand name NN from M/s. Green Malleables, have not retracted their statements and hence those statements can be used against the Appellants, that though the order -in -original mentions the appellant's request for cross examination, the appellant never specified the names of the dealers whom they want to cross examination, that the plea regarding the cross examination was not made before the Commissioner (Appeals), that the Department relies upon the statement dated 27/1/01 of Shri Rajiv Kumar who is common person of M/s. Green Engineering Corporation, M/s. Green Malleables and M/s. Green Marketers and wherein he has stated that M/s. Green Engineering Corporation had shifted its casting and annealing operations to the factory of M/s. Green Malleables during January 2000 but later on they dropped the idea of shifting of the rest of their machinery and that the brand name of the pipe fittings is affixed at casting stage only, that from this statement it is clear that as early as in January 2000 itself, M/s. Green Malleables had started affixing the brand name NN on the pipe fittings manufactured by them and that in view of this, there is no infirmity in the impugned order, that perusal of the records resumed from M/s. Green Engineering Corporation reveals that M/s. Green Marketers had not purchased any pipe fittings from M/s. Green Engineering Corporation during the period from 01/01/2000 to 23/05/2000 and that in view of the above submissions, there is no infirmity in the impugned order.
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