2004 (3) TMI 488 - AT - Central Excise

Summary

Issues:
1. Denial of benefit of concessional rate of duty claimed under Notification No. 175/86-C.E.
2. Applicability of SSI exemption to goods bearing a registered brand name.
3. Eligibility for benefit under SSI notification despite the brand name holder not availing the benefit.

Analysis:

1. The appellants, engaged in manufacturing synthetic rubber aprons, were denied the benefit of concessional duty rate under Notification No. 175/86-C.E. The denial was based on the brand name "Precitex," registered to another entity not availing the concession. A penalty equal to the duty amount was imposed. The lower Appellate Authority upheld the denial, citing the brand name holder's non-availment of SSI exemption.

2. The appellants argued that the brand name holder being a registered SSI unit should determine eligibility for the notification benefit, irrespective of the brand name holder's duty status. They contended that since identical goods by the brand name holder were duty-free, their goods should also be classified similarly. The Revenue reiterated that eligibility arises only if duty is payable, which was not the case here.

3. The Tribunal examined the conditions for SSI exemption, requiring goods specified in the notification, clearances below the ceiling limit, and registration as an SSI unit. Citing precedent cases, the Tribunal emphasized that eligibility for the notification is independent of the brand name holder's benefit availing status. As long as the brand name holder meets SSI criteria and clearance value limits, the users of the brand name are entitled to the SSI exemption. The Tribunal ruled in favor of the appellants, overturning the denial of the benefit and penalty, aligning with the precedent's interpretation of eligibility criteria under SSI notifications.

In conclusion, the Tribunal held that the non-availment of the SSI exemption by the brand name holder does not preclude the appellants from benefiting under the SSI exemption. The decision emphasized that eligibility for the exemption is determined by specific criteria such as value of clearance, SSI registration, and usage of the brand name for specified goods, irrespective of the brand name holder's benefit availing status. The appeal was allowed, setting aside the previous order.