2005 (10) TMI 394 - AT - Central Excise

Summary

Issues:
1. Interpretation of para 7 of Notification No. 175/86-C.E. regarding exemption for excisable goods with a brand name of another person.
2. Validity of the Board's review order timeline concerning the appeal.
3. Application of Supreme Court rulings on brand name connection to excisable goods.

Analysis:

1. The appeal addressed the interpretation of para 7 of Notification No. 175/86-C.E. regarding the exemption eligibility of branded goods cleared by the respondents to M/s. Maruti Udyog Ltd. The department alleged that the brand name on the product label indicated a connection with M/s. Maruti Udyog Ltd., making the goods ineligible for SSI exemption. However, the Collector of Central Excise disagreed, stating that the absence of the word 'MARUTI' in Hindi on the labels distinguished them from M/s. Maruti Udyog Ltd.'s branding. The Collector allowed the benefit of exemption to the assessee, leading to the Revenue's appeal.

2. A preliminary objection was raised regarding the timeline of the Board's review order concerning the appeal. The respondents' counsel questioned the validity of the review order, suggesting it might have exceeded the one-year limitation period prescribed under the Central Excise Act. Upon scrutiny of the original records, it was confirmed that the review order was signed within the limitation period, thus overruling the preliminary objection.

3. The judgment also considered the application of Supreme Court rulings on the connection between brand names and excisable goods. The Tribunal noted a previous order concerning clearances made to M/s. Premier Automobiles Ltd., where the use of brand names 'Maruti' and 'Premier Automobiles' on products attracted the provisions of para 7 of Notification No. 175/86. Citing settled law, the Tribunal emphasized that the brand name affixed to goods need only indicate a connection with the brand name-owner to trigger the relevant notification's provisions. Consequently, the Tribunal held that the brand name used by the respondents on goods supplied to M/s. Maruti Udyog Ltd. created a connection, making them ineligible for SSI benefit under the notification.

In conclusion, the Tribunal allowed the Revenue's appeal, setting aside the Collector's decision and ruling that the branded goods cleared to M/s. Maruti Udyog Ltd. were not eligible for SSI benefit under the relevant notification.