ORDER
P.G. Chacko, Member (J)
1. After examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we proceed to deal with the appeal.
2. The original authority demanded duty of Rs. 16;59,858/- from the appellants (manufacturers of pharmaceutical products) for the period 01.09.1997 to 14.06.2002. This demand was consequential to denial of SSI benefit to the assessee on the ground that, during the said period, they were clearing their products under brand names, which belonged to their customers. Aggrieved by this decision, the party preferred an appeal to the Commissioner (Appeals) and also filed therein an application for waiver of predeposit of duty and penalty amounts. The application was disposed of by the appellate authority directing the party to predeposit an amount of Rs. 5 lakhs (out of the aforesaid amount of over Rs. 16.5 lakhs) under Section 35F of the Central Excise Act. This deposit was not made by the party, who filed an application with the appellate authority seeking modification of its order on the ground of financial hardships. It appears, this application was not considered by ld. Commissioner (Appeals), who, upon finding that the predeposit directed had not been made, dismissed the assessees’ appeal on the ground of non-compliance with Section 35F. Hence the present appeal.
3. Ld. Counsel has claimed strong prima facie case for the appellants. It is submitted that the brand names belonged to the appellants as evidenced by the assignment deeds executed by them in favour of their buyers (dealers). It is also submitted that the finding of the original authority regarding the ownership of the brand names in question is exclusively based on statements of dealers and that the request made by the appellants for an opportunity to cross-examine those witnesses was turned down by the original authority. Finally, it is submitted that the appellant had closed down his manufacturing activity as early as in 2002 and is no longer in the field on account of his financial bankruptcy. Asked whether there was any evidence of financial hardships on record, ld. Counsel submits that there is none.
4. Ld. SDR submits that the appellants, in their statement, admitted that they were not owners of the brand names in question. She farther submits that this statement was never retracted. In view of this admission, it was not necessary for the adjudicating authority to gather any evidence through cross-examination of the witnesses cited by the appellants.
5. After giving careful consideration to the submissions, we find that the confessional statement of the appellants prima facie would disprove their case with regard to the ownership of the said brand names. We have also come across a Deed of Assignment’ executed by the appellants in favour of another party. From this document, it appears to us that the appellants were actually exercising the right of ownership over some of these brand names, even though they had not obtained registration thereof from the Trade Mark Registering Authority. Thus, on merits, they do not seem to have a strong prima facie case. The fact that the appellants are not in their manufacturing activity for the last 3 years is relevant to their plea of financial hardships. The Department does not appear to have a contra finding regarding this aspect. Having regard to the totality of the facts and circumstances, we are of the view that the appellants should be given a more sympathetic consideration for the purpose of Section 35F. Ld. Commissioner (Appeals) asked them to deposit Rs. 5 lakhs for this purpose. We reduce this amount to Rs. 1 lakh. The appellants shall deposit this amount of Rs. 1 lakh for the purpose of their appeal being heard on merits by the lower appellate authority.
6. For the reasons noted above, we set aside the impugned order and remand the case to ld. Commissioner (Appeals) for decision on merits, subject to predeposit, by the appellants, of the aforesaid amount of Rs. 1 lakh (Rupees One Lakh Only) within a period of 8 weeks from the date of receipt of a certified copy of this order. Needless to say, the appellants should be given a reasonable opportunity of being heard.
(Dictated and pronounced in open Court)