2013 (8) TMI 348 - AT - Central Excise

Benefit of the Small Scale Industries exemption Notification - Commissioner granted benefit - Held that - manufacturer is not entitled for the benefit of SSI exemption who have the goods manufactured and who is not Indian or the brand name who is not a manufacturer in India - Following decision of NAMTECH SYSTEMS LTD. Versus COMMISSIONER OF CENTRAL EXCISE, NEW DELHI 1999 (12) TMI 145 - CEGAT, NEW DELHI and Fristam Pumps (I) Pvt Ltd vs CCE 2003 (3) TMI 481 - CEGAT, MUMBAI - Decided in favour of Revenue.

Summary

Issues:
Entitlement for benefit of SSI exemption Notification No. 8/98-CE when goods are affixed with foreign collaborator's brand name.

Analysis:
The case involved the appellant, represented by the Additional Commissioner, appealing against the impugned order passed by the Commissioner (Appeals). The respondent, despite being noticed, did not appear during the hearings. The respondents were manufacturing machines for paint and thinner industries under Chapter 84 of the Central Excise Tariff, clearing them with the brand name of a foreign collaborator, CDRAISE. A Show Cause Notice was issued, denying the benefit of Notification No. 8/98-CE, leading to the imposition of duty and penalties by the adjudicating authority. The Commissioner (Appeals) had initially ruled in favor of the respondent, prompting the Revenue to appeal, citing precedents like Namtech Systems Ltd and Fristam Pumps (I) Pvt Ltd cases to argue against the benefit of the Notification due to the foreign brand association.

The investigation revealed the admission by the respondent's Authorized Signatory that the goods were indeed cleared with the foreign collaborator's brand name, CDRAISE. The issue at hand was whether the respondents were entitled to the SSI exemption under Notification No. 8/98-CE when the goods bore the foreign brand name. Citing the Namtech Systems Ltd and Fristam Pumps (I) Pvt Ltd cases, the Tribunal held that manufacturers not of Indian origin or using a foreign collaborator's brand name were not eligible for the SSI exemption. The Tribunal's decision was supported by the dismissal of a similar appeal by Fristam Pumps (I) Pvt Ltd in the Supreme Court. Consequently, the impugned order was set aside, the Revenue's appeal was allowed, and the adjudicating authority's decision was reinstated. The Cross Objections filed by the Respondents were also disposed of in similar terms.