2013 (9) TMI 842 - AT - Central Excise

Brand name used on packing materials - SSI Exemption not deniable under Notification No. 8/2003-C.E. - Exemption w.e.f. 1-10-1987 granted - Waiver of Pre-deposit - Appellant was engaged in the manufacture of plastic containers, caps, plugs which are subject to excise duty - The Department was of the view that since the appellant was clearing those goods with brand name of M/s. Dabur India Ltd. they were not entitled to the benefit of SSI exemption under Notification No. 8/2003-C.E. - Held that - Prima facie it appeared that where a manufacturer covered under SSI exemption Notification had been clearing specified goods in the nature of packing material namely printed cartons, metal containers, adhesive, PP caps, crown cork or metal labels bearing brand name of the buyer he would not be denied SSI exemption under Notification No. 8/2003-C.E - the denial of SSI exemption to the appellant appears to be unjustified - the appellants had been able to make out a prima facie case for waiver of condition of pre-deposit of duty demand, interest and penalty - Accordingly the stay applications were allowed and the pre-deposit of duty demand, interest and penalty as a condition of hearing of the appeals Decided in favor of assesse.

Summary

Issues:
1. Denial of SSI exemption under Notification No. 8/2003-C.E. to the manufacturer for clearing goods with the brand name of another entity.
2. Imposition of duty demand, interest, and penalty on the appellant-company and its Director.

Analysis:
1. The case involved the appellant, a manufacturer of plastic containers, caps, and bottles subject to excise duty, who supplied these products to another company with their brand name embossed. The Department contended that the appellant was not entitled to SSI exemption under Notification No. 8/2003-C.E. due to the branding issue, leading to a demand of Rs. 7,35,174 and penalties. The appellant challenged this denial, citing Notification No. 24/2009-C.E. (N.T.), issued retrospectively to clarify that using a brand name on packaging material supplied to the brand owner does not disqualify the manufacturer from SSI exemption. The Commissioner (Appeals) upheld the denial, but the Tribunal found the denial unjustified based on the notifications and granted a waiver for pre-deposit of duty demand, interest, and penalty, allowing the appeals to proceed.

2. The Tribunal analyzed Notification No. 24/2009-C.E. and Notification No. 47/2008-C.E., which clarified the conditions for SSI exemption regarding goods like printed cartons, metal containers, caps, etc., bearing the buyer's brand name. The Tribunal found that the denial of SSI exemption to the appellant was unwarranted based on these notifications, indicating a prima facie case for waiver of the duty demand, interest, and penalty. Consequently, the Tribunal allowed the stay applications, dispensed with the pre-deposit condition, and scheduled the appeals for further proceedings, emphasizing the unjust nature of the denial of SSI exemption to the appellant.