Per Shri V.P. Gulati :

The issue in the appeal relates to the demand of duty in respect of goods held to have been manufactured by the appellants with the Brand name of another. The appellants had availed of the benefit of Notification 175/86 in respect of these and had held out that the brand name owner was eligible to the benefit of Notification 175/86 and had produced a Provisional certificate of registration as an SSI Unit in the name of the brand name owner. The fact in brief as set out in the Ld. lower authority's order and which are not in dispute are set out below:

"On 13.1.92 the Central Excise Officers of Madras VII Division, Preventive Unit, visited the said factory for verification of the records. During the course of verification, they found that the factory besides manufacturing confectionery with their own brand name `Harts', also manufactured and supplied to M/s. Mikie Orient Confectioneries, Madras-8, confectioneries with their brand name `Mikie'. They also manufactured supplied confectionery to M/s. National Products, Bangalore, with their brand name `NP'.

In respect of the products manufactured and supplied under their own brand name, they availed exemption under Notification No. 175/86-CE dt. 1.3.86 as amended and in respect of the products with brand name 'NP' they did not avail the concession and cleared the said goods at full rate of duty. In respect of the products with brand name 'NP', they did not avail the concession and cleared the said goods at the full rate of duty. In respect of the products manufactured and supplied to M/s. Mikie Orient Confectioneries with brand name 'Mikie', they have availed exemption under Notification 175/86 as amended and cleared the goods to them under concessional rate of duty for the period from August 1990 to January, 1991.

On investigation it was found that M/s. Mikie Orient Confectioneries, were not engaged in the manufacture of any product and not having a factory but were only trading in confectionary goods and therefore they did not come under the purview of exemption prescribed under Notification No. 175/86-CE dt. 1.3.86 as amended.

Shri P. Velayutharajan, Director of M/s. Harts Cocoa Products P. Ltd., gave a statement dt. 13.1.92 stating that the brand name company, Viz., M/s. Mikie Orient Confectionery did not have any factory or machinery for the manufacture of the said product. However, they have registered themselves as an SSI Unit and their SSI certificate bearing No. 18/7/21369 expired on 11.6.91.

Shri S. Subramanian, Power of Attorney holder and Shri D. Jayakumar, Assistant Manager (Finance) of M/s. Mikie Orient Confectioneries, in their statement dt. 7.2.92 and 14.1.92 respectively have confirmed the fact that they do not own any factory for the manufacture of they said product and their company was started at No. 150, Montieth Road, Madras-8, and subsequently functioning at 74, Pantheon Road, both the premises were used as Office premises only."

2. The duty has been demanded in respect of the clearance of goods with the Brand Name 'Mikie' and longer period of limitation has been invoked in terms of rule 11 (A) proviso for reason of a suppression of fact.

The Ld. Advocate has urged the following pleas: