2006 (3) TMI 482 - AT - Central Excise

Summary

Issues:
1. Denial of Small Scale Exemption Notification based on brand name usage.
2. Allegation of clearing goods with another brand name.
3. Confiscation of goods manufactured by the appellant.
4. Contention regarding fixing brand name by a third party.

Analysis:
The appeal was filed against the order denying the Small Scale Exemption Notification due to the alleged use of a different brand name by the appellants. Revenue claimed that the appellants were clearing goods without their brand name, and M/s. Jahan Enterprises was fixing the brand name "Element" on their behalf. The Adjudicating authority confirmed the demand and confiscated the goods seized during the visit. The appellant argued that they were only supplying goods without any brand name to M/s. Verve Marketing Pvt. Ltd., and it was M/s. Jahan Enterprises that was affixing the brand name. Revenue relied on the statement of Shri Mohammad Tazim Hussain from M/s. Jahan Enterprises, who allegedly admitted to labeling goods on behalf of the appellants.

The Tribunal found no evidence at the appellant's premises indicating the use of the brand name "Elements." The goods were cleared to M/s. Verve Marketing Pvt. Ltd., and no investigation was conducted by Revenue regarding this aspect. It was noted that labeling was carried out by M/s. Jahan Enterprises, and conflicting statements were provided by Shri Mohammad Tazim Hussain regarding who paid for the labeling services. Due to the lack of evidence showing the appellants were clearing branded goods or any connection between M/s. Jahan Enterprises and the appellants, the denial of the Small Scale Exemption Notification was deemed unsustainable. Consequently, the confiscation of goods was set aside, and the appeal was allowed, granting the appellants any consequential relief as per the law.

The judgment highlights the importance of substantial evidence in cases involving the denial of benefits based on brand name usage and the significance of conducting thorough investigations to establish factual connections between parties involved in the supply chain. The decision emphasizes the need for a clear link between actions and consequences before imposing penalties or denying exemptions in tax matters.