Case Law Details
Sonic Chain Pvt Ltd Vs C.C.E. & S.T.-Rajkot (CESTAT Ahmedabad)
Introduction: In the case of Sonic Chain Pvt Ltd Vs C.C.E. & S.T.-Rajkot, the Central Excise and Service Tax Appellate Tribunal (CESTAT) Ahmedabad addressed a significant issue related to Central Excise Rule 26. The central question was whether a penalty should be imposed in the absence of malafide intention to evade duty.
1. Background and Issue: The core issue in this case revolves around the eligibility of Sonic Chain Pvt Ltd for Small Scale Industries (SSI) exemption under Notification No. 08/2003-CE, dated 01.03.2003. The company was manufacturing bracelets for wristwatches bearing the brand names of other companies, such as Timex, Titan, and Sonata.
2. Appellant’s Argument: The appellant contended that despite using the brand names of other companies, the bracelets they manufactured were an integral part of wristwatches supplied to the brand owners. According to Para 4(a) of the notification, they argued that they should be eligible for exemption. They cited several judgments in support of their claim.
3. Revenue’s Response: The revenue’s representative argued that the bracelets were neither components nor parts of machinery, equipment, or appliances. Additionally, the appellant had not followed the required procedure for the clearance of branded components or parts. Consequently, they believed the appellant did not qualify for the exemption.
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