2005 (5) TMI 527 - AT - Central Excise

Summary

Issues:
- Whether the appellants are entitled to the benefit of small-scale exemption limit under notification Nos. 1/93 and 16/97 for the period 1994-95 to 1997-98.
- Whether the valves bearing the brand name 'Prime' belonging to another manufacturer can be cleared under the exemption notification.
- Whether the casting for the valves being manufactured by other independent foundries affects the eligibility for the exemption.
- Whether the appellants affix the brand name of the main manufacturer on the valves.

Analysis:
1. The appellants, engaged in valve manufacturing under Chapter 84 of the CETA, were availing the small-scale exemption limit of Rs. 30 lakhs. The Department disputed the clearance of valves bearing the brand name 'Prime' belonging to another manufacturer under the exemption notification, leading to proceedings against the appellants for denial of benefits and imposition of penalties.

2. The main contention was that the casting for the valves was done by independent foundries as per the brand owner's design, with the brand name affixed at the casting stage. The appellants argued that they did not affix the brand name and merely worked on the already embossed castings, citing relevant circulars and precedents to support their claim.

3. Referring to the Tribunal's decision in a similar case, it was held that if the brand name is embossed at the forging stage before reaching the manufacturer and the assessee does not affix any brand name, they are not affected by the exclusion clause of the notification. This decision was confirmed by the Supreme Court, supporting the appellants' position in the present case.

4. Another Tribunal decision emphasized that the benefit of the SSI exemption should not be denied when castings with another person's brand name are received, and the appellant does not affix the brand name. Based on these legal precedents and the clear interpretation of the law, the Tribunal set aside the impugned orders and granted relief to the appellants.

5. In conclusion, the Tribunal ruled in favor of the appellants, emphasizing that since the law on the issue was clear and aligned with the appellants' arguments, both appeals were allowed with consequential relief granted to the appellants.