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2013 (1) TMI 330 - SC - Central ExciseS.S.I. Notification No. 1/93-C.E. dated 28th February, 1993 - Whether the manufacture and sale of specified goods not physically bearing a brand name from branded sale outlets would disentitle an assessee from the benefit of SSI Notification - Held that - A brand/ trade name must not be reduced to a label or sticker that is affixed on a good. The test of whether the good is branded or unbranded, must not be the physical presence of the brand name on the good, but as Explanation IX reads, is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of the person. Therefore, whether the brand name appears in entirety or in parts or does not appear at all cannot be the chief criterion, primary focus has to be on whether an indication of a connection is conveyed in the course of trade between such specified goods and some person using the mark. See Commissioner of Central Excise, Trichy Vs. Rukmani Pakkwell Traders 2004 (2) TMI 69 - SUPREME COURT OF INDIA Commissioner of Central Excise, Chandigarh-I, Vs. Mahaan Dairies 2004 (2) TMI 73 - SUPREME COURT OF INDIA wherein held that once it is established that a specified good is a branded good, whether it is sold without any trade name on it, or by another manufacturer, it does not cease to be a branded good of the first manufacturer. The good will continue to be a branded good of the company that manufactured it. In case of goods sold from exclusive single brand retail outlets or restaurants or stores, the fact that a good is sold from such a store ought to be a relevant fact in construing if the good is its branded good or not. In the case of such goods, perhaps a rebuttable presumption arises in favour of such goods being branded goods of the specified store. Such a presumption can be rebutted if it is shown that the specified good being sold is in fact a branded good of another manufacturer. However, all other goods, sold without any appearance of a brand or trade name on them, would not be deemed unbranded goods to the contrary, they may be deemed to be branded goods of that outlet unless a different brand or trade name appears. Hence, it is not necessary for goods to be stamped with a trade or brand name to be considered as branded goods under the SSI notification. Applying the said principles on the facts at hand, failure to see how the same branded cookies, sold in containers, can transform to become unbranded ones, when sold from the same counter, or even from an adjoining counter, without packaging carrying the brand name. Admittedly, on the same cookies, physically bearing brand Cookie Man sold in containers carrying brand name duty is paid. Once established that the environment of the goods can be gone into to construe if it is branded or not, no reason to see why the environment of the goods should be limited to the plates and tissues, on which they are served. Thus as the cookies were sold from a dedicated outlet of Cookie Man where no other products but those of the assessee were sold. The invoices carry the name of the company and the cookies were sold from a counter of the store, the store s decision to sell some cookies without containers that are stamped with its brand or trade name does not change the brand of the cookies. As convinced that the cookies sold even without inscription of the brand name, indicate a clear connection with the brand name, in the course of assessee s business of manufacture and sale of cookies under the brand name Cookie Man . They continue to be branded cookies of Cookie Man and hence cannot claim exemption under the SSI Notification.
Issues Involved:
1. Whether the manufacture and sale of specified goods that do not physically bear a brand name, from branded sale outlets, disqualifies an assessee from the benefit of S.S.I. Notification No. 1/93-C.E. 2. Classification of cookies under Chapter sub-heading 1905.11 as biscuits. 3. Eligibility for S.S.I. exemption for cookies sold loosely without packaging bearing the brand name. Issue-wise Detailed Analysis: 1. Disqualification from S.S.I. Exemption for Goods Not Physically Bearing a Brand Name: The primary legal question was whether the manufacture and sale of cookies that do not physically bear a brand name but are sold from branded retail outlets disqualify the assessee from availing S.S.I. exemption under Notification No. 1/93-C.E. The Court examined the interpretation of "brand name" or "trade name" as per Explanation IX of the notification, which includes any name or mark used to indicate a connection in the course of trade. The Court concluded that the physical manifestation of a brand name on the specified goods is not a necessary requirement for disqualification from the exemption. Instead, the environment of the goods, including packaging, accessories, and the specific outlet, can indicate that the goods are branded. The Court emphasized that a brand name should not be reduced to merely a label or sticker affixed to a good. Therefore, the cookies sold from the branded outlet "Cookie Man" were considered branded goods, even if they did not physically bear the brand name. 2. Classification of Cookies under Chapter Sub-heading 1905.11: The Court noted that there was no dispute regarding the classification of the specified goods (cookies) under sub-heading 1905.11 as biscuits manufactured with the aid of power. This classification was accepted by both parties and was not a point of contention in the judgment. 3. Eligibility for S.S.I. Exemption for Cookies Sold Loosely: The Court addressed the issue of whether cookies sold loosely from the counter, without packaging bearing the brand name, were eligible for S.S.I. exemption. The Commissioner had initially concluded that since the cookies did not bear the brand name, the assessee was eligible for the exemption. However, the Court disagreed with this interpretation, stating that the environment of the goods, including the branded outlet from which they were sold, indicated a connection with the brand name "Cookie Man." The Court held that the cookies sold loosely were still branded goods of "Cookie Man" and thus did not qualify for the S.S.I. exemption. Conclusion: The Court concluded that the cookies sold from the branded outlet "Cookie Man," whether packaged or sold loosely, were branded goods and did not qualify for the S.S.I. exemption. The decision of the Tribunal affirming the Commissioner's order was set aside, and the appeal was allowed, with the parties bearing their own costs.
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