2013 (8) TMI 427 - AT - Central Excise

Manufacture of Jewellary - Exemption - Affixing brand name on Jewellary - Pre-deposit Stay application - Notification No.5/2006-CE, dated 01.03.2006 stipulates the payment of duty on articles of jewellery on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself The contention of the Revenue that the alphabets I or Q are brand name. The jewellery demonstrated by the learned senior counsel would show that alphabet I or Q were used with the letters A , B and H . According to the applicant, the said alphabets were used to identify the job worker, which is in conformity with illustration referred in the Board s Circular F.No.B-1/1/2005-TRU, dated 04.03.2005. Held that - As per the case of Austrailian Foods (India) Pvt. Ltd. 2013 (1) TMI 330 - SUPREME COURT , where no brand name was affixed or inscribed on the cookies. In that case, the Hon ble Supreme Court allowed the appeal of the Revenue as the brand name used the word cookie man accompanied with the logo on the plastic pouches/containers in which the goods were sold. In the present case, the notification imposed a pre-condition that the brand name or the trade name is indelibly affixed or embossed on the articles of jewellery itself . Thus, the said decision appears to be not applicable to the facts of the present case - Demand is barred by limitation would be looked into at the time of final hearing Applicant is directed to deposit Rs.7 crores (Rupees Seven Crores only) within a period of four weeks.

Summary

Issues:
1. Whether the demand of duty on jewellery cleared embossed with specific alphabets constitutes a brand name for exemption under Notification No.5/2006-CE.
2. Whether the demand of duty is sustainable on jewellery where the brand name was discontinued.
3. Whether the demand of duty is partly barred by limitation.
4. Whether the alphabet 'I' or 'Q' used on the jewellery constitutes a brand name for levy of excise duty.

Analysis:
1. The applicant, engaged in jewellery manufacturing, faced demand of duty for jewellery embossed with specific alphabets. The senior counsel argued against the demand, citing Board's Circular and Notification No.5/2006-CE. He contended that the alphabets were for identification, not a brand name, referencing relevant circulars and judicial precedents. The Revenue representative argued that the alphabets indicated the brand "Tanishq." The Tribunal found the Circular not strictly applicable but agreed with the senior counsel's contention that the alphabets were not a brand name.

2. The Tribunal noted that the applicant ceased embossing the brand "Tanishq" on jewellery to reduce duty liability. The Commissioner observed the change and levy impact on the brand. The Tribunal found that the duty liability arises when the brand name is indelibly affixed on the jewellery itself. The Revenue's claim that the alphabets constituted a brand name was refuted by the applicant's explanation of using them for job worker identification, aligning with the Board's Circular.

3. The senior counsel argued that the demand was partly barred by limitation, citing the amendment history of duty exemptions. The Tribunal reserved judgment on this aspect for final hearing, considering the facts presented.

4. After evaluating the contentions and circumstances, the Tribunal directed the applicant to deposit a specified amount within a set period, with the balance dues waived and recovery stayed pending appeal. The decision was pronounced in open court, addressing the duty demand issue comprehensively while preserving the applicant's rights during the appeal process.