2017 (4) TMI 1292 - AT - Central Excise

SSI Exemption - use of Brand name - whether the said PP Rings used by the appellant for protecting the ends of pipe having threading during handling/transportation is packing material or not? - Held that - use of PP Rings is only protecting the ends of pipe having threading during handling/transportation. The packing in general terms is anything which protects something by covering it wholly or partly. Admittedly, these PP Rings have been used for protecting the ends of pipe having threading during the transportation. It is none other than is only a packing material. Whether the appellant is entitled for benefit of exemption notification C.B.E. & C. Circular No. F. No. 213/28/87-CX6, dated 27-11-1987 or not? - Held that - As it has been clarified by the circular that the packing material manufactured by assessee under the brand name/trade name of the goods to be packed in such packing material, the benefit of SSI exemption is available - As the appellants are manufacturing the PP caps as packing material having brand name of their buyer, they are not hit by mischief of the N/N. 8/2003, dated 1-3-2003 i.e. SSI exemption. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the PP Rings used by the appellant for protecting the ends of pipes during handling/transportation qualify as packing material.
2. Whether the appellant is entitled to the benefit of exemption notification C.B.E. & C. Circular No. F. No. 213/28/87-CX6, dated 27-11-1987.

Analysis:
1. The appellant manufactured PP Rings used by steel pipe manufacturers for protecting the ends of pipes during handling/transportation. The Revenue claimed the appellant was manufacturing branded goods and thus not entitled to exemption. The appellant argued that the PP Rings were merely for identification, relying on relevant Circulars and case laws. The Tribunal found that the PP Rings functioned as packing material by protecting the ends of pipes during transportation, meeting the criteria of packing material. Therefore, the PP Rings were considered packing material.

2. The Tribunal examined the C.B.E. & C. Circular dated 27-11-1987, which clarified the dutiability of packing materials manufactured under the brand name/trade name of the goods to be packed. As the PP Rings were manufactured by the appellant under the brand name of the buyer, they were deemed eligible for SSI exemption under Notification No. 8/2003. The Tribunal held that the appellant was entitled to the exemption, setting aside the demands confirmed in the impugned order. Consequently, the appeal was allowed with any consequential relief.

This judgment highlights the importance of determining the classification of goods as packing material and the application of relevant exemptions based on the nature of manufacturing and branding practices.