2010 (8) TMI 930 - AT - Central Excise

Summary

Issues involved: Eligibility for small scale exemption based on branding of chewing tobacco.

Summary:
The judgment by the Appellate Tribunal CESTAT CHENNAI dealt with the eligibility of the appellants for small scale exemption concerning the branding of chewing tobacco. The issue revolved around the use of brand names on the labels of the appellants' products and its impact on their entitlement to the exemption. The first period under consideration was from 1-5-2003 to 31-3-2004, during which the abbreviation 'ARR' was prominently displayed on the label. The subsequent period saw the label indicating 'Mfrs. ARR ENTERPRISES' along with the address. The Tribunal referred to legal precedents, including the case of CCE, Trichy v. Rukmani Packwell Traders, where it was established that even the use of a part of a brand name or trademark could disentitle a person from claiming small scale exemption if it indicated a connection in the course of trade. Consequently, for the first period, the Tribunal ruled that the appellants' chewing tobacco was considered branded due to the presence of the brand name 'ARR,' leading to the denial of exemption for that period. However, for the subsequent period starting from 1-4-2004, where only the manufacturing company's name was used on the label, the Tribunal held that the appellants were entitled to small scale exemption based on the decision in the case of CCE v. Mahaan Dairies. Therefore, the duty demand for the first period was confirmed, while the penalty was set aside. On the other hand, the impugned orders for the subsequent period were overturned, allowing the appellants' appeals. In conclusion, Appeal No. E/658/2005 was partly allowed by setting aside the penalty, while Appeal Nos. E/869/2006 and E/351/2007 were fully allowed.