Home Case Index All Cases Central Excise Central Excise + HC Central Excise - 2016 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 531 - HC - Central ExciseSSI Exemption - brand name - units from where the manufacturer / assessee have been procuring their products were using registered trademarks - Held that - when the Department went in appeal before the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT), no ground was raised that the Respondents was buying the products from a person using a registered trademark. The Department did not urge before the CESTAT that it had documents in its possession to substantiate such plea. It is not understood why, information concerning registration of trademarks, which is in the public domain, could not be gathered by the Department and placed before the CESTAT. Permitting the Department to do so at this stage, nearly eight years after the issuance of the show cause notice, is neither justified nor proper. The CESTAT has held that even if the affixing of a sticker to the footwear in question may amount to manufacture, the Respondents would nevertheless be entitled to exemption under the aforementioned notification as an SSI unit. Revenue appeal dismissed. - Decided against the revenue.
Issues:
1. Eligibility for exemption as a Small Scale Industry (SSI) due to the use of registered trademarks by suppliers. 2. Validity of show cause notice and Order-in-Original issued by the Department. 3. Commissioner (Appeals) decision on the ownership of brand names. 4. Department's failure to raise grounds before the CESTAT regarding the use of registered trademarks by suppliers. 5. CESTAT's decision on entitlement to exemption under the SSI notification. 6. Maintainability of the appeal before the High Court. Analysis: 1. The Appellant argued that the Respondents were ineligible for SSI exemption due to their suppliers using registered trademarks, as discovered in documents from September 2015. The contention was based on Notification No. 8/2003-Central Excise, which could affect the Respondents' eligibility for the exemption. 2. The appeal stemmed from a show cause notice issued in September 2008 and the subsequent Order-in-Original from September 2009. The Commissioner (Appeals) allowed the Respondents' appeal in July 2010, emphasizing the Department's burden to prove ownership of brand names not belonging to the Respondents. 3. The Department failed to raise the issue of suppliers using registered trademarks before the CESTAT, despite possessing relevant information. The Court criticized the Department for not presenting this crucial evidence earlier and deemed it unjustified to introduce it years after the initial show cause notice. 4. The CESTAT determined that even if affixing stickers to footwear constituted manufacturing, the Respondents would still qualify for SSI exemption. The Court found no substantial legal question in this factual determination, rejecting the Respondent's objection on the appeal's maintainability before the Supreme Court. 5. Ultimately, the High Court dismissed the appeal and application, affirming the CESTAT's decision on exemption entitlement under the SSI notification. The judgment concluded the legal proceedings related to the Department's allegations and the Respondents' eligibility for the exemption. This detailed analysis covers the various issues addressed in the judgment, highlighting the legal arguments, decisions, and implications for each aspect of the case.
|