2013 (11) TMI 1286 - AT - Central Excise

Activity manufacture or not Affixation of brand name - Waiver of Pre-deposit -Revenue was of the view that the appellant was clearing their own manufactured product under their own brand name, in the guise of trading activities Held that - Traded goods and the imported goods, though identical but were different in model numbers - the goods supplied to the appellants customers are not out of imported goods and the same stand manufactured by the appellants but cleared in the guise of trading activity - No labelling or relabelling has been done on the imported goods The appellant was not supplying the imported goods to their customers under their own brand name of Accentrix when no labelling of the same was done by the appellant and the purchase order was clearly in respect of Accentrix brand name. The adjudicating authority has scrutinised the bills of entries in respect of imported goods - different model numbers stand specified - the fact, i.e. change in the model numbers lead a prima facie view that goods imported by the appellant were different than the goods traded by them the appellant is not able to make a prima facie in their favour - the applicant directed to Rupees Twenty five lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Issues:
1. Whether the appellants were clearing their own manufactured products under their brand name, in the guise of trading activities?
2. Whether affixing a brand name on fully manufactured imported goods amounts to manufacturing?
3. Whether the goods supplied to customers were actually manufactured by the appellants or cleared in the guise of trading activity?
4. Whether the model numbers of imported goods and traded goods were different, indicating clandestine manufacture and clearance under the appellants' brand name?
5. Whether the appellants were supplying imported goods under their own brand name when no labeling of the goods was done by them?

Analysis:
1. The appellants were engaged in manufacturing Vibrators and converters under their brand name 'Accentri'. The Revenue alleged that the appellants were clearing their manufactured products under their brand name, disguised as trading activities. The demand raised was confirmed, and a penalty was imposed. The Commissioner's order examined whether the goods supplied to customers were traded goods unconnected with manufacturing activities. The Commissioner concluded that the model numbers of imported goods and traded goods were different, indicating that the goods supplied to customers were manufactured by the appellants but cleared as trading activity.

2. The appellants argued that affixing their brand name on fully manufactured imported goods did not amount to manufacturing. However, the Commissioner found discrepancies in model numbers between imported goods and traded goods. The Commissioner's observations led to the conclusion that the goods imported by the appellants were different from the goods traded by them, suggesting clandestine manufacture and clearance under their brand name.

3. The purchase orders from customers were for the 'Accentrix' brand of converters. The appellants claimed they were importing goods and labeling them with their brand name, which they argued did not constitute manufacturing. However, a letter from another party stated that no labeling or relabeling was done on the imported goods. The discrepancy in model numbers between imported goods and traded goods raised doubts about the appellants' activities.

4. The adjudicating authority scrutinized bills of entries for imported goods and found different model numbers in traded invoices issued by the appellants. The model numbers on traded invoices matched those the appellants were manufacturing. This discrepancy in model numbers suggested that the goods imported and traded were not the same, favoring the Revenue's case. The appellants were directed to deposit a specific amount as a condition for hearing their appeal, with the pre-deposit of the balance amount of duty and penalty waived during the appeal's pendency.

← Previous Next →