9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (11) TMI 622 - AT - Central ExciseSSI unit - clubbing of clearance - simultaneous manufacture of branded and unbranded goods - Notification No. 8/2003-C.E., dated 1-3-2003. - Held that - Once a brand/trade name is used in the course of trade of the manufacturer, who is indicating a connection between the goods manufactured by him and the person using the brand/trade name, the SSI exemption is lost - Apex Court decision in Kohinoor Elastics Pvt. Ltd. v. CCE, Indore (2005 -TMI - 47406 - SUPREME COURT OF INDIA) wherein it was held that, Clause 4 of the Notification is clear and unambiguous. It says that the exemption is lost if the goods bear the brand/trade name of another - the words Bharti Airtel was a brand name and clubbing of clearances, both branded and unbranded was unwarranted for which orders of the authorities below are set aside - Decided in favor of the assessee
Issues Involved:
1. Whether the mark "Bharti Airtel" printed on the goods constitutes a brand name. 2. Eligibility for SSI exemption under Notification No. 8/2003-C.E., dated 1-3-2003. 3. Clubbing of branded and unbranded goods for duty calculation. 4. Imposition of penalties and interest on duty demand. 5. Invocation of the extended period for demand and penalties. Detailed Analysis: Issue 1: Whether the mark "Bharti Airtel" printed on the goods constitutes a brand name. The appellants manufactured Polymer Flexible Pipes with the mark "Bharti Airtel" and paid excise duty on these goods, while claiming SSI exemption for unmarked goods under Notification No. 8/2003-C.E., dated 1-3-2003. The Revenue argued that "Bharti Airtel" is not a brand name but the name of a company, and thus, the goods were not branded. The Tribunal, following the Supreme Court's decision in Kohinoor Elastics Pvt. Ltd. v. CCE, Indore, held that the term "brand name" includes any mark used to indicate a connection in the course of trade between the goods and the person using the mark. The Tribunal concluded that "Bharti Airtel" was indeed a brand name as it indicated a connection between the goods and Bharti Airtel Ltd. Issue 2: Eligibility for SSI exemption under Notification No. 8/2003-C.E., dated 1-3-2003. The Revenue's position was that the value of clearances made to Bharti Airtel Ltd. should not be excluded while determining the aggregate value for SSI exemption, as the goods were not branded. The Tribunal, however, determined that since "Bharti Airtel" was a brand name, the goods marked with this name should be treated as branded goods, and the appellant correctly paid duty on these goods while claiming SSI exemption for unmarked goods. Issue 3: Clubbing of branded and unbranded goods for duty calculation. The Revenue issued show cause notices for the years 2007-08 and 2008-09, proposing to club the branded and unbranded goods, which led to exceeding the SSI exemption limit of Rs. 1.5 crores. The Tribunal found that clubbing the clearances was unwarranted, as the goods marked with "Bharti Airtel" were branded and should be treated separately from unbranded goods. Issue 4: Imposition of penalties and interest on duty demand. The adjudicating authority imposed penalties equal to the duty amounts for both years and interest on the demand. Additionally, a penalty of Rs. 8 lakhs was imposed on the Director under Rule 26 of the Central Excise Rules, 2002. The Tribunal, however, held that there was no misdeclaration by the appellant, and the department was aware of the facts from the year 2006-07. Therefore, the penalties were unwarranted and were set aside. Issue 5: Invocation of the extended period for demand and penalties. The Revenue invoked the extended period for demand and penalties, arguing that the appellant had not declared the use of the brand name. The Tribunal found that the facts were within the knowledge of the department, and there was no willful suppression of material facts by the appellant. Consequently, the invocation of the extended period was deemed unwarranted. Conclusion: The Tribunal set aside the orders of the authorities below, holding that the mark "Bharti Airtel" was a brand name, and clubbing of branded and unbranded goods was unwarranted. The penalties and interest imposed were also set aside, and the appeals were allowed.
|
