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2015 (10) TMI 1569 - AT - Central ExciseExemption to textile products - whether jute bags manufactured by the Appellant and classifiable under Chapter Heading 6305, printed with some particulars of other person, could be considered as bearing a brand name or sold under a brand name. - Denial of benefit of Notification No.30/2004-CE dated 09.7.2004 - whether the appellants are eligible to the benefit of Notification No.30/2004-CE dated 09.7.2004 as amended by Notification No.12/2011-CE dated 01.3.2011 and Notification No.30/2011-CE dated 24.3.2011 - Held that - Facts in issue in Prakash Industries case was that the appellants therein were manufacturers of HDPE sacks solely for the supply to M/s Orissa Cement Ltd. on which they had printed/affixed the brand name of the buyers. The Appellant claimed the benefit of SSI exemption Notification No.175/86-CE dated 1.3.1986. On reference of the issue, whether the Appellant are eligible to the said exemption, the Larger Bench of the Tribunal had observed that affixation of the buyer s name on the HDPE sacks/bags, would not come within the mischief of para 7 of the Notification No. 175/86-CE, accordingly, the benefit of SSI exemption Notification No.175/86 dated 1.3.1986 could not be denied to them. The reasoning and observation of the Larger Bench of the Tribunal in this case was specifically overruled by the Hon ble Supreme Court in Kohinoor Elastics Pvt. Ltd. s case 2005 (8) TMI 115 - SUPREME COURT OF INDIA . On affixing the brand name/trade name of another person, an assessee would be ineligible to avail the benefit of the exemption notification. It flows from the said observation that it is not necessary to examine the reason/cause for affixing the brand-name of another person. It is also clearly laid down that trade does not indicate a trade in its general sense that the goods be brought to the market for sale, but the dealing/trade between the assesse-manufacturer and its customers would meet the requirement. Also, it has been clearly laid down that the goods manufactured need not be sold to the customers, but even if it is used captively by the person whose brand name has been used, the manufacturer would not be eligible to the benefit of the said notification. - undisputedly the appellants have affixed the names, logos and other particulars of another person i.e. FCI etc. to whom the bags are sold/cleared. Therefore, in our opinion, on affixing the particulars which have also been considered as branding by the jute commissioner, since branding charges are also included in the price of the jute bags, hence, it cannot be denied that the jute bags bear the brand name of another person and accordingly not eligible to the benefit of Notification No.12/2011-CE dated 1.3.2011 and 30/11-CE dated 24.3.2011. Show Cause Notices were issued proposing denial of the benefit of the exemption Notifications, which have been adjudicated by the Ld. Commissioner on the basis of a fair interpretation of the Notifications and the principles of law settled by the courts and Tribunal on the issue and concluded that the benefit of the exemption notification is not admissible. - we set aside the impugned Order to the extent of imposition of penalty and also confirmation of the demands, wherever extended period of limitation has been invoked. In such cases, the duty however, should be computed for the normal period of limitation - Decided partly in favour of assessee.
Issues Involved:
1. Eligibility for exemption under Notification No. 30/2004-CE as amended by Notification Nos. 12/2011-CE and 30/2011-CE. 2. Definition and interpretation of "brand name" under Chapter 63 of CETA, 1985. 3. Applicability of extended period of limitation and imposition of penalties. 4. Correct computation of duty demand. Issue-wise Detailed Analysis: 1. Eligibility for Exemption under Notification No. 30/2004-CE as Amended by Notification Nos. 12/2011-CE and 30/2011-CE: The appellants manufactured jute bags and claimed exemption from duty under Notification No. 30/2004-CE, as amended. The exemption was denied on the grounds that the jute bags bore brand names or were sold under brand names, which disqualified them from the exemption. The Tribunal examined whether the jute bags, printed with particulars such as the buyer's name, logo, and other details, constituted "branded goods" under the exemption notifications. It was determined that the printed particulars on the jute bags met the definition of "brand name" as per Chapter Note (iv) of Chapter 63 of CETA, 1985, thus making them ineligible for the exemption. 2. Definition and Interpretation of "Brand Name" under Chapter 63 of CETA, 1985: The Tribunal referred to Chapter Note (iv) of Chapter 63, which defines "brand name" as a name or mark used to indicate a connection in the course of trade between the product and the person using such name or mark. The Tribunal held that the printed particulars on the jute bags, including the buyer's name and logo, indicated a connection in the course of trade between the product and the buyer, thereby qualifying as a "brand name." The Tribunal relied on the Supreme Court's judgment in Kohinoor Elastics Pvt. Ltd. vs. CCE, which established that affixing a brand name of another person on goods disqualifies the manufacturer from availing the exemption. 3. Applicability of Extended Period of Limitation and Imposition of Penalties: The Tribunal found that the issue primarily involved the interpretation of the term "brand name" under the relevant notifications. Given that the appellants had printed the particulars on the jute bags as per the directions of the Jute Commissioner and that all facts were within the knowledge of the department, the Tribunal held that the extended period of limitation was not applicable. Consequently, the imposition of penalties under Section 11AC of the Central Excise Act, 1944, was set aside. The Tribunal directed that the duty demand should be recomputed for the normal period of limitation. 4. Correct Computation of Duty Demand: The appellants contended that the computation of duty demand was erroneous and that their grievances regarding excessive demand were not addressed by the adjudicating authority. The Tribunal acknowledged these contentions and directed the adjudicating authority to re-compute the duty demand and interest for the normal period, taking into consideration the appellants' grievances regarding computation errors. The Tribunal remanded the matter to the adjudicating authority for re-computation. Conclusion: The Tribunal concluded that the jute bags manufactured by the appellants, printed with particulars of other persons, were not eligible for exemption under Notification No. 30/2004-CE as amended. The Tribunal set aside the imposition of penalties and the confirmation of demands for the extended period of limitation. The matter was remanded to the adjudicating authority for re-computation of the duty demand and interest for the normal period, addressing the appellants' grievances regarding computation errors. The appeals were partly allowed to this extent.
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