ORDER
Jyoti Balasundaram, Vice President
1. The issues for determination in the above appeal are whether the concessional rate of duty as per notification 16/97-CE dated 1.4.1997 (for small scale units) is admissible to chocolates cleared by the appellants herein during the period March to July, 1997 and whether the extended period of limitation is applicable against them.
2. The benefit of SSI exemption has been denied to the appellants on the ground that the chocolates bore the brand name “ASSORTED TAJ CHOCOLATES” owned by the Indian Group of Hotels Co. Ltd. and not owned by the assessees, while the extended period has been invoked on the ground that in the classification declaration No. 1/97-98 dated 1.4.1997 under Rule 173B of the Central Excise Rules, they claimed the benefit of exemption and declared that that they do not manufacture the product under the brand name of any other person or company, thereby leading to suppression of vital facts from the Revenue authorities.
3. We have heard both sides.
4. The finding that the name “ASSORTED TAJ CHOCOLATES” is the brand name of some other company is based upon the statement of Shri Krishna M. Jorkar, chief executive and production in-charge of the assessee and Shri Ajay Bardhan, accounts manager of the assessee. Shri Jorkar has stated that in addition to their own brand name “Birdys by Taj” which they put on cartons meant for product manufactured by them, they are clearing chocolates bearing brand name “ASSORTED TAJ CHOCOLATES” belonging to Indian Hotels Co. Ltd. and produced samples of packing cartons used for “ASSORTED TAJ CHOCOLATES” and also deposed that these cartons are sealed with the golden stickers which have the wordings “Taj Group of Hotels India” printed thereon and that the Taj Mahal Hotel Bombay is one of the hotels of Indian Hotels Co. Ltd. and was manufacturing their own “ASSORTED TAJ CHOCOLATES” and other Taj branded products in their own hotel premises for sale. Shri Bardhan has confirmed that “ASSORTED TAJ CHOCOLATES” was the brand name of another person. It is significant to note that these statements have not been retracted, and therefore constitutes sufficient evidence to hold that the goods in question bore a brand name not belonging to the assessees. The contention of the learned Counsel for the appellants that the burden of proof cast upon the Revenue to show that the name “ASSORTED TAJ CHOCOLATES” belonged to another person, has not been discharged for the reason that the Taj Hotels Group has not confirmed that the above mentioned name belonged to them, is not tenable in the light of the statements of Shri Jorkar and Shri Bardhan which we held are sufficient to establish the case of the Revenue regarding use of someone else’s brand name so as to disentitle the appellants to the benefit of the SSI notification.
5. The contention that since the chocolates in question were not sold by The Indian Hotels Co. Ltd., there is no connection in the course of trade between the goods and the person owning the brand name so as to debar the appellants from the benefit of exemption under SSI notification is not tenable in view of the statement of Shri Jorkar that Taj Mahal Hotel soils chocolates bearing their brand name “ASSORTED TAJ CHOCOLATES” in view of the fact that an MRP is printed on the labels of the cartons used for packing chocolates, filed by the appellants along with the appeal and which have not been disputed to be the relevant labels. In any event, in the light of the recent judgment of the apex court in Kohinoor Elastics Pvt. Ltd. v. CCE, Indore 2005 (188) ELT 3 (SC), that SSI exemption is available only to goods not bearing a brand name or trade name of another person and that the exemption is lost even if such goods are manufactured for captive consumption, we hold that the exemption is not available for the goods in question even if the appellants have manufactured the chocolates and delivered them to that customer for the reason that the course of trade for such manufacturer is such manufacture and sale as seen from paragraph 7 of the apex court’s judgment cited supra. Although learned Counsel attempts to persuade or to take a view that the above judgment is not applicable in the case of goods which are not sold and would apply only to cases where intermediate products are used in the manufacture of final products which are admittedly sold (in that case the goods in question were elastics which were affixed on undergarments which were then sold) and to final products cleared and sold as such, we are not so persuaded as no such restriction appears in the judgment.
6. In the light of the above, we hold that the benefit of notification 16/97-CE is not admissible for the goods in question.
7. The proviso to Section 11A(1) of the Central Excise Act is available to the department as the appellants had misdeclared that they were not manufacturing the product in the brand name of any other person and thus suppressed the fact of use of brand name of another person on their goods. The intention to evade payment of duty can be gleaned from this deliberate misdeclaration. The submission that the declaration of non-user of someone else’s brand name is only in respect of bakery items other than chocolates is devoid of merit as the relevant declaration in which the appellants have stated that they are manufacturing products in their brand name and not in the brand name of any other person or company is only for two products, viz. chocolates in any form whether or not containing “nuts, fruits…” and “cakes and pastry of different sizes of different flavours.”
8. In the result, we uphold the duty demand. However, in the totality of the facts and circumstances of the case, we reduce the penalty to Rs. 3,00,000/- (Rupees three lakhs only).
9. The appeal is thus partly allowed.