Per P.G. Chacko:

The facts of the case are briefly as follows:-

2. The appellants are manufacturers of doctor blades for Rotogravure and Flexographic printing machines, falling under Chapter Sub-heading 8443.00 of the Central Excise Tariff Schedule. They had commenced their manufacturing activity in November 1993 and got themselves registered as SSI unit with the Directorate of Industries (Government of Uttar Pradesh) on 25.3.94 for the manufacture of the aforesaid product. The goods so manufactured were cleared under the brand name 'BONUS', which was claimed by the appellants to be their own brand name. On 15.3.94, they had filed with the Central Excise department a declaration under Rule 174 of the Central Excise Rules claiming exemption from licensing control in respect of the product on the ground that they were an SSI unit with clearance value of goods below the limits prescribed under Notification No. 1/93-CE dated 28.2.93. On 24.3.94, they submitted a letter to the Central Excise Range Supdt. intimating that the trade mark 'BONUS' belonged to them and that they had applied for registration of the trade mark. In that letter, they also stated that the total sales value of the goods for the period 1.4.93 to 28.2.94 was only Rs. 7,27,428.75. That letter purported to affirm the claim for exemption under Notification No. 1/93-CE ibid. Later on, as they found that their clearances were likely to cross the exemption limit under the notification, they applied for, and obtained, registration with the department under Rule 174 of the Central Excise Rules for manufacture of the aforesaid product. At about that stage, officers of Central Excise visited the appellant's unit and found that the goods were being cleared under the brand name 'BONUS'. The appellants then produced Assignment Deed dated 22.11.93 executed between them and M/s. Ecograph A.G., Switzerland, in support of their claim that they were the proprietors of the trade mark 'BONUS' for the whole of India with effect from26.4.93. The 26th April, 1993 was the date on which a joint venture agreement was executed between the appellants and the Swiss Company for the manufacture of goods in India under the above trade mark. The joint venture agreement was also produced to the department. After verification of the documents and connected enquiries, the department issued show-cause notice dated 18.1.95 to the appellants alleging that, by virtue of para 4 of Notification No. 1/93, they were not entitled to the benefit of exemption under the notification as they were affixing the goods with the brand name/ trade mark belonging to another person (viz. the foreign company) who was not eligible for the benefit of the notification. The show-cause notice further alleged that the appellants had misdeclared facts in their letter dated 24.3.94 and suppressed vital information from the department. On the basis of these allegations, the show-cause notice invoked the extended period of limitation under the proviso to Section 11A (1) of the Central Excise Act and demanded duty amounting to Rs. 4,09,910/- on the clearances of the goods for the period from November 1993 to 29.9.94, and proposed to impose penalty on the appellants for alleged contravention of Central Excise Rules. The appellants, in their reply, denied all the allegations and contested the demand of duty and the proposal for imposition of penalty. In adjudication of the dispute, the Commissioner of Central Excise confirmed the demand of duty againstthe appellants and imposed on them a penalty of Rs. 20,000/-. Hence the present appeal of the party.

3. Perused the records and heard both sides. Ld. advocate, Sh. A.R. Madhav Rao for the appellants submitted that M/s. Ecograph A.G. had assigned all rights, title and interest in the trade mark' BONUS' in India in respect of the goods, together with the goodwill of the business, to the appellants for valid consideration under Assignment Deed dated 22.11.93. He submitted that die Swis