ORDER

Per P.S. Bajaj:

This order will dispose of six appeals filed by the appellants against the common order in appeal of the Commissioner (Appeals) dated 27.7.2000 vide which he had affirmed the common order in original of the Additional Commissioner dated 18.2.99 who confirmed the duty demands and imposed penalties of various amounts as indicated in his order in original.

2. The facts leading to the filing of the present appeals may briefly be stated as under:

3. Appellant (1) to (5) were engaged in the manufacture of auto parts falling under Chapter 87 of the schedule to CETA. They were manufacturing the specified goods bearing brand name "SI" which belonged to appellant No. (1) and marketing the same through appellant No. (6). They were all availing SSI exemption under Notification No. 1 /93-CE dated 28.2.93. During the course of checking their factory premises by the officers of the Central Excise, it was found that the SSI Exemption to appellants No. (2) to (5) was hit by clause (4) of Notification No. 1/93-CE and the branded goods were wrongly cleared without payment of duty and as such were liable to be confiscated under Rule 173-Q of the Central Excise Rules. From the factory premises of appellant No. (3) and (5) branded goods (auto parts) bearing "SI" trade mark valued at Rs. 94745/- and Rs. 7290/- respectively were seized on the reasonable belief that they were liable to be confiscated under Rule 173-Q of the Rules. Similarly, branded goods with brand name "SI" valued at Rs. 22576/- were detained at the factory premises of appellant No.(2). However, no manufactured goods were found in the factory premises of appellant No. (1) and (4). On search of premises of appellant No. (6) through whom the other appellants were marketing, the goods valued at Rs. 46,92,917/- were detained. The Statements of the partners of appellant No. (1), supervisor of appellant No. (4) and partners of appellant No.(6) were also recorded. Thereafter, show cause notice dated 10.6.97 was issued to all the appellants for the confiscation of the branded goods under Rule 173-Q of the Rules and also for confirmation of the duty amounts as indicated therein and imposition of penalties. On appellant No. (6), penalty under Rule 209-A of the Rules was proposed to be imposed, in that show cause notice.

4. Appellants contested the correctness of that show cause notice. They in their reply alleged that appellants No. (1) to (5) were manufacturing not common but different goods and they all were separate legal entities. The brand name "SI" was being used by them under mutual settlement/memorandum arrived at between them. They further averred that packing of goods with brand name at traders premises did not attract mischief of para 4 of the exemption notification. Appellant No. (6) also denied his liability for imposition of penalty under Rule 209-A of the Rules.

5. The Additional Commissioner, however, did not agree with the version of the appel lants and confirmed the duty demands and imposed penalties of various amounts on appellant No. (1) and (5) besides ordering the confiscation of the seized goods. He also imposed penalty under Rule 209-A of the Rules on appellant No. (6). This order of the Additional Commissioner was affirmed in appeal through the common impugned order in appeal by the Commissioner (Appeals).

6. Appellants have filed the present appeals being dissatisfied with the impugned order in appeal of the Commissioner (Appeals).

7. We have heard both the sides and gone through the record.

8. Admittedly, appellant No. (1) was the owner of the brand name "SI" as per the allegations in the show cause notice who surrendered the Central Excise licence on 18.2.94 as their clearances were below the SSI limit of Rs. 30 lakhs. These facts are also evident from the order in original of the Additional Commissioner. That being so, neither the branded goods with brand name "SI" lying in the factory premises of the firm of appellant No. (1) nor sold by it to the trader, appellant No.(6), could be confiscated. This firm could not be saddled with the duty demand of Rs. 1,98,273/- alongwith penalty of equal amount under Rule 173-Qofthe Rules by the adjudicating as well as appellate authority.

9. Appellants No.(2) to (5) are said to have used the brand name "SI" on the auto parts which did not belong to them, but to appellant No. (1) and certain goods lying at their factory premises, as detailed in the order in original, were seized. But, there is nothing on the record to suggest if the so branded goods manufactured by these appellants were the same as manufactured or traded after surrendering the licence on 18.2.94, by appellant No. (1). They in their reply to the show cause notice categorically alleged that they were manufacturing different goods, i.e. auto parts, than those manufactured/traded by appellant No.(1). According to them, appellant No. (1) was manufacturing gear/shaft, while appellant No.(2) Rear Wheels. Similarly, appellant (3) was manufacturing Hubs GB (Gear Box) and appellant No.(4) Kich Levers, Kick shaft and Flangs, while appellant No.(5) Stands, Wheel Rims. There is no material on the record to suggest that this version of these appellants was factually found to be incorrect on verification as neither Additional Commissioner as the adjudicating authority nor the Commissioner (Appeals) as appellate authority, has so recorded in their respective orders. These appellants also produced during the adjudication proceedings, copy of settlement/memorandum arrived at between them and the appellant No. (1) without exchange of any consideration.

10. When appellant No.(2) to (5) were manufacturing different items of auto parts, though branded with the brand name "SI" belonging to appellant No.(1), still they could not be denied the benefit of exemption Notification No. 175/86-CE now 1/93-CE when the owner of that brand name (appellant No. 1) was manufacturing different goods. In this context, reference may be made to Taj Serpent Eggs Factory Vs. CCE, 1995 (9 RLT 539=1996 (85) ELT 78 wherein the brand name belonging to others was used by the assessee on the goods other than produced by the brand owners, it was observed that the SSI Exemption benefit under Notification No. 1/93-CE was not deniable. This very view had been again reiterated, by the Tribunal in CCE Meerut Vs. Gopal Soap Industries, 1999 (30) RLT 286=1999 (111) ELT 876.

11. Apart from this, neither confiscation of the branded goods which were still lying in the factory premises of appellant No.(2) to (5) could be ordered nor any duty in respect thereof could be claimed from them under Rule 173-Q of the Rules. Under the said rule action could be taken only if there was removal of the goods or non-accountal of the goods in the relevant record. It is not the case of the Revenue for having not even so alleged in the show cause notice, that the seized goods were not found to be accounted for in the relevant record or that they were being loaded in the vehicles for clearance from the factory premises for supply to appellant No.(6). Therefore, the confiscation of the branded goods lying in their factory premises could not be legally ordered. No duty demand in respect of those goods could be also raised from appellant No.(2) to (5) for having not cleared the same from the factory premises. The duty could be demanded only if they had cleared the goods.

12. The al legations in the show cause notice regarding receipt of branded goods valued at Rs. 46,92,917/- by appellant No.(6) from appellant No. (1) to (5) were vague and general. No seizure and confiscation of these goods could be made. The branded goods supplied by appellant No.(1) to this party (appellant No.6) could not be seized legally as appellant No.(1) was admittedly the owner of the brand name "SI" and entitled to the benefit of the exemption Notification No. 1/93-CE, as observed above. No duty demand could also be raised in respect of those goods. Even appellant No.(6) as trader, could not be penalised for receipt of those goods from appellant No.(1). Against the appellants No.(2) to (5), regarding supply of the branded goods to appellant No.(6), no details were furnished in the show cause notice. The date, month and year during which supply of branded goods was made by them were not mentioned in the show cause notice. No documents were also recovered from the possession of these appellants vide which they supplied the goods to appellant No.(6). Similarly, no recovery of any document also took place from appellant No.(6) vide which he received the branded goods from these appellants. The Additional Commissioner in his order in original, has not referred to any of the documents for substantiating the allegations against these appellants. He has simply saddled them with the duty amount and imposed penalties of the same amounts on the simple ground that they were found using brand name belonging to appellant No.(1) on the auto parts, by relying on the law laid down in Kali Aerated Water Vs. U.O.I. 1995 (76) ELT 265 (Madras-HC). But the ratio of the law laid down in that case by the Honourable High Court is not attracted to the facts of the present case referred to above. In that case, the trade name belonged to the joint family business and later on it was registered in the name of the partner and the other partners used that brand name with the permission of that partner in the business separately carried on by them. Under these circumstances, it was observed that prohibition of brand name would be attracted and they would not be entitled to the concessional benefits. But such is not the position in the case in hand. In this case even the appellant No.(1) who was admittedly the owner of the brand name had been burdened with the duty and the penalty besides confiscation of the goods lying in his factory premises as well as in the premises of appellant No.(6) to whom he supplied. On appellant No.(2) to (5), the duty and penalty had been imposed, regarding the goods which were never cleared by them under the brand name of appellant No.(1) from their factory premises. Those goods were still lying there. Regarding the supply of branded goods by them to appellant No.(6) there was no concrete evidence on the file to substantiate the same. Consequently, appellant No.(6) also could not be punished under Rule209-A of the Rules. Therefore, the impugned order of the Commissioner (Appeals) cannot be legally sustained against any of the appellants.

13. In view of the discussion made above, the impugned order of the Commissioner (Appeals) is set aside and all the appeals of the appellants are accepted with consequential relif, if any, permissible under the law.