2002 (3) TMI 887 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 175/86 regarding exemption on specified goods due to brand name affixation.

Analysis:
The case involved a dispute regarding the applicability of an exemption contained in Notification No. 175/86 concerning the affixation of a brand name on specified goods. The respondent, a manufacturer of electric control panels, had affixed the brand name "RIECO" on the panels supplied to Rathi Industrial Equipment Co. Ltd. The Commissioner initially found that the requirement in Paragraph 7 of the notification was not satisfied as the manufacturer did not affix the brand name on the control panel, which was already affixed. Consequently, the proceedings were dropped. The appeal contended that it was immaterial who affixed the brand name and argued that the respondent should have affixed the brand name. The departmental representative emphasized these grounds.

The crux of the issue lay in the interpretation of Paragraph 7 of Notification No. 175/86, which states that the exemption would not apply if a manufacturer affixed specified goods with the brand name of a person not eligible for the exemption. The explanation in the notification clarified that a "brand name" or "trade name" indicated a connection in the course of trade between the specified goods and a person using that name.

The decision referenced a previous case, Prakash Industries v. CCE, where the Larger Bench of the Tribunal considered a similar scenario. It was concluded that if a manufacturer affixed goods with a brand name and supplied them to the person using that brand name without further trade, the relationship between the brand name and the goods in the course of trade was not established. Therefore, the provisions of Paragraph 7 would not apply in such cases. The decision in CCE v. Wood's Glamour was disapproved, highlighting that affixing a brand name on goods supplied for further trade would attract the conditions of the notification.

Ultimately, the Tribunal dismissed the appeal, aligning with the decision of the Larger Bench that in cases where a manufacturer affixed a brand name on goods supplied to the person using that brand name without further trade, the conditions of Paragraph 7 would not be triggered. The departmental representative's argument that it was in the course of trade was not accepted, as the decision favored the respondent based on the interpretation of the notification and relevant case law.