[Order per : P.S. Bajaj, Member (J)]. - The above captioned appeals have been filed by the appellants against the impugned order-in-appeal dated 6-8-2001 passed by the Commissioner of Central Excise (Appeals) vide which he has upheld the order-in-original of the Addl. Commissioner dated 26-2-1999.

2. The appellants are engaged in the manufacture of Rice Rubber Rolls and Rice Polishers falling under Chapter Heading 4016 of the Central Excise Tariff Act, 1985. After visiting their factory premises on 27-7-1999 the Central Excise Officers found that they were manufacturing the goods in the brand name of “ALASKA’ which belonged to M/s. Vinko Auto Indus. Ltd. and also did not disclose in their declaration regarding the use of this brand name belonging to another person. They were not eligible for the SSI exemption on that account, but still, they illegally availed it. Shri Ravi Gupta, Director of the firm, appellants No. 1 even admitted in his statement regarding the use of the brand name “ALASKA” belonging to another person in the manufacture of the goods. Accordingly, show cause notice was issued to the appellants vide which differential duty of Rs. 16,90,578/- for the period from 1-4-1995 to 27-7-1998 was demanded. The adjudicating authority confirmed the duty demand of Rs. 16,90,578.19 with equal amount of penalty under Section 11AC through the order-in-original by denying the SSI Exemption under Notification No. 1/93 on account of user of brand name on the goods belonged to another person. The adjudicating authority also ordered confiscation of the seized goods with option to get the same redeemed on payment of redemption fine of Rs. 5 lakhs. Personal penalty of Rs. 1 lakh was also imposed on appellant No. 2 under Rule 209A. This order of the adjudicating authority had been affirmed by the Commissioner (Appeals) subject to the reduction in the redemption fine from Rs. 5 lakhs to Rs. 1 lakh.

4. The learned Counsel has contended that there is no evidence on the record to prove that the brand name ‘ALASKA’ belonged to another person who was using the same and that even otherwise after 1-7-1996 this brand name having been assigned by the owner to the appellants, the appellants were entitled to use the same and from that date SSI Exemption could not be declined to them. He has also contended that even prior to that, the appellants in their Classification List of the year 1994, intimated to the Excise Department regarding the user of the brand name ‘ALASKA’ by them on the manufactured goods and as such there was no suppression of facts from the Excise Department and that the duty demand for the disputed period from 1-4-1995 to 27-7-1998 is time barred as show cause notice was served only on 14-9-1998. He has further contended that neither Modvat claim of the appellants nor element of duty payable had been considered while computing the duty demand for the disputed period.

5. Regarding imposition of penalty under Section 11AC of the Act, the learned Counsel has submitted that the same could not be imposed for the period prior to 28-9-1996, the date when the provisions of this Section came into force. The impugned order, according to the learned Counsel, deserves to be set aside in toto.

6. On the other hand, the learned JDR, has simply reiterated the correctness of the impugned order.

7. We have heard both sides and gone through the facts on record. It is well settled that SSI Exemption under Notification No. 1/93 cannot be availed by any assessee who indulges in the use of brand name on the goods manufactured by him belonging to another person who is not entitled to exemption under the said Notification. In the instant case, admittedly, the appellants had been found using the brand name “ALASKA” on the goods manufactured by them. This brand name as even admitted by the appellant No. 2 who is the Director of the firm, appellants No. 1 belonged to M/s. Vinko Auto Industries Ltd. This company, no doubt, as stated by him in his statement, belonged to his brother, but he has not denied that his brother was carrying on business independently and he had no concern with the same. Even his brother, Shri Ravi Gupta, who is the Managing Director of the company, M/s. Vinko Auto Indus. Ltd., in his statement recorded during investigation, had categorically stated that the brand name ‘ALASKA’ belonged to his company and that he had been manufacturing the goods under this brand name. He had also stated that his company had been claiming the benefit of SSI exemption till the year 1996-97 and after that the company started paying full rate of duty for having exceeded the exemption limit of Rs. 3 crores. His this statement was recorded on 1-9-1998. On the same lines had been the statement of Manager of the company, Shri Madhu Sudan. Therefore, the appellants were not legally entitled to use the brand name ‘ALASKA’ which belonged to the company, M/s. Vinko Auto Indus. They had been illegally and unauthorisedly using this brand name on their goods and availing the SSI Exemption.

8. The plea of the appellants that w.e.f. 1-7-1997, they had obtained assignment of the brand name from the owner i.e. M/s. Vinko Auto Indus, Ltd. and from that date they were entitled to use the same and as such could not be denied SSI Exemption, had been rightly not accepted by the authorities below. The alleged assignment dated 1-7-1997 propounded by the appellants, is nothing but a fake document. The copy of this deed has been placed on record which is at page 58. It had been scribed on a stamp paper of Rs. 50, but on the back of that stamp paper neither there is a date of sale nor the name of the stamp vendor who sold it, even the name of the purchaser of the stamp paper had not been indicated. The back of the stamp paper is totally blank. Similarly, under the alleged signatures of the executants i.e. appellants, and M/s. Vinko Auto Indus. Ltd., there is no date. The name of the notary from whom it was got attested is also not mentioned. Only initials of the alleged notary who attested the deed are there and from those initials nothing can be made out. As per the terms of this assignment deed, the consideration passed from the appellants to the assignor, was of Rs. 1,000/-, but the receipt placed on record by the appellants issued by the Director of the assignor company i.e. M/s. Vinko Auto Indus. Ltd., is undated.

9. Besides this, if there had been actual execution of this assignment deed regarding the assignment/transfer of the brand name ‘ALASKA’ by the owner, M/s. Vinko Auto Indus., the appellants must have disclosed to the Central Excise Officers, when they visited their factory premises on 27-7-1998. The statement of appellant No. 2, Director of the firm, appellants No. 1, was recorded on the spot on that very date, wherein he did not utter any word about the execution of any assignment deed in favour of his firm by M/s. Vinko Auto Indus. Ltd. He rather admitted, at that time, that the brand name ‘ALASKA’ belonged to M/s. Vinko Auto Indus. Ltd. and deposed as under -

“We are using this brand name by virtue of family mutual understanding for which there is no written agreement and there is no consideration to use this brand name.”

Similarly, when statement of Shri M.R. Gupta, Managing Director of M/s. Vinko Auto Indus. Ltd., was recorded on 1-9-1998, he also did not refer to the assignment of brand name ‘ALASKA’ belonging to his company to the appellants. He rather categorically stated that the brand name ‘ALASKA’ belonged to his company. Even, Shri Madhu Sudan, authorized signatory and Manager of M/s. Vinko Auto Indus. Ltd., who allegedly attested the assignment deed and the receipt vide which the consideration allegedly passed on to his company, nowhere disclosed in his statement recorded on 1-9-1998 regarding execution of any assignment deed in respect of the brand name between the appellants and the company, M/s. Vinko Auto Indus. Ltd. From all these facts and circumstances, it can be concluded without any hesitation, that the alleged assignment deed had been prepared later on by the appellants in connivance with the company, M/s. Vinko Auto Indus. Ltd. just with a view to defraud the Excise Department and as such it has been rightly brushed aside by both the authorities below.

10. The learned Counsel has heavily leaned on the certificate dated 12-1-1999 issued under the Trade and Merchandise Marks Act, 1958 in favour of the appellants acknowledging the transfer of the brand name “ALASKA” in their name from 1-7-1996 by virtue of assignment dated 1-7-1996 to contend that the genuineness of the assignment deed could not be questioned by the authorities below. But we are unable to accept his contention. The perusal of this certificate shows that whatever facts were alleged by the appellants in the form, TM-23, dated 14-9-1998, those were accepted by the Joint Registrar without examining the genuineness of the assignment deed. He accepted the transfer of the brand name in favour of the appellants without holding any enquiry into the matter. But for the purpose of central excise duty, the appellants were duty bound to prove the due execution and genuineness of the assignment deed before they could be allowed to take its advantage, for claiming the SSI Exemption. The assignment deed, as observed above, is nothing but a fake document prepared by the appellants with the help of the Director of the assignor company, M/s. Vinko Auto Indus. Ltd., who is the real brother of the appellants No. 2 with a view to hoodwink the Excise Department. Therefore, no capital out of the above referred certificate issued by the Joint Registrar under the Trade and Merchandise Marks Act, 1958 can be claimed by the appellants.

11. Another argument pressed into service by the learned Counsel is that that the Commissioner (Appeals) has failed to appreciate that demand of Rs. 1,87,345.41 could not be confirmed as it related to the goods, namely, Rubber Transmission Belting, which were not being manufactured by the appellants under the brand name ‘ALASKA’. But, in our view, the learned Commissioner (Appeals) has rightly not considered this aspect as it had never been the case of the appellants before the adjudicating authority that these goods were being manufactured by them without using the brand name ‘ALASKA’. No proof in that regard had been also furnished by them before that authority.

12. The argument of the learned Counsel that the appellants were required to get benefit of Modvat credit as the inputs used were duty paid, in view of the law laid down by the Tribunal in the case of Apex Steels (P) Ltd. v. CCE, Chandigarh, (T), also cannot be accepted as no such plea was taken by them before the adjudicating authority as is evident from the perusal of the order-in-original. Even before the Commissioner (Appeals) this plea was never raised. There is also nothing on the record to suggest if all the formalities had been complied with by the appellants for claiming the Modvat credit on the duty paid inputs. Therefore, at this stage, the plea of the appellants regarding entitlement of the Modvat credit on the duty paid inputs cannot be entertained and allowed.

13. Another argument of the learned Counsel that in arriving at the excisable value of the goods, the element of duty payable has to be excluded in view of the recent judgment of the Apex Court in the case of CCE, Delhi Ltd. v Maruti Udyog - (S.C.), while it had not been done by the authorities below, also cannot be accepted for want of any such plea raised and evidence produced, by the appellants, before the adjudicating authority. It is only an afterthought plea which has to be ignored at this stage.

14. Yet another contention of the Counsel for the appellants that the duty demand is time-barred as appellants had been using the brand name ‘ALASKA’ since 1988 and this fact was within the knowledge of the Revenue authorities and that in the Classification List of the year 1994-95, it was also mentioned that the brand name ‘ALASKA’ belonged to M/s. Vinko Auto Indus. Ltd. and as such the Revenue authorities very well knew that the use of the brand name of another person by the appellants cannot be given any weight for holding the duty demand to be time-barred. There is no material on the record to suggest if the appellants ever in clear terms informed the Excise Department that the brand name ‘ALASKA’, being used by them, belonged to M/s. Vinko Auto Indus. Ltd. The use of this brand name, since 1988, as contended by the learned Counsel also does not stand proved from any tangible evidence on the record. In their Form L-4 dated 27-1-1988, there is no reference to the brand name to be used by them on the excisable goods i.e. Rice Rubber Roles and Rice Polishers. The copy of the certificate dated 11-5-1988 referred to by the learned Counsel which purports to had been issued by the Superintendent of Central Excise, that appellants had declared their brand name as “ALASKA” and were availing the SSI benefit, does not carry any value. In this certificate, the date from which the appellants were using this brand name had not been mentioned and from which record this certificate was prepared had also been not recorded by the Superintendent. The Counsel himself has not disputed before us that after 1994, no Classification List disclosing the use of the brand name ‘ALASKA’, belonging to M/s. Vinko Auto Indus. Ltd., was filed by the appellants. The photocopies of the two orders-in-original; one dated 28-5-1993 and other dated 9-1-1992 passed by the Asstt. Commissioner also do not in any manner advance the plea of the appellants that there was no suppression of facts by them from the Excise Department. In those orders, there is no reference regarding the user of the brand name by the appellants of another person. Those orders were passed on the strength of show cause notices issued for certain irregularities/omissions committed by the appellants. The fact that the Revenue Officers before issuing those notices, visited the factory premises of the appellants on many occasions, is also immaterial and of no aid to them in the face of the law laid down by the Larger Bench of the Tribunal in the case of Nizam Sugar Factory v. CCE, Hyderabad - (LB-T), wherein it has been observed that it is for the assessees to disclose the true facts regarding their manufacturing activities to the Excise Department and the assessees can not take advantage of the fact that the Excise Officials had been visiting their units in order to resist the invocation of the larger period against him on the ground of suppression of true facts.

15. Since the appellants themselves failed to disclose about the use of the brand name ‘ALASKA’ belonging to another person to the Excise Department by them, they had been rightly held to be guilty of suppression of material facts from the Department with intend to evade payment of duty. Therefore, extended period of limitation has been correctly invoked and as such the duty demand cannot be held to be time-barred.

16. However, the contention of the learned Counsel that penalty under Section 11AC of the Act for the period prior to 28-9-1996 - the date when the provisions of this Section came into force, could not be imposed, deserves to be accepted. The duty period involved is from 1-4-1995 to 27-7-1998. Therefore, the penalty imposed under Section 11AC, equal to the duty amount, deserves to be modified. We accordingly reduce the penalty to Rs. 13 lakhs (rupees thirteen lakhs only).

17. Except for the modification in the penalty under Section 11AC of the Act, the impugned order of the Commissioner is upheld. Consequently, both the appeals of the appellants stand disposed of accordingly in the above terms.