2017 (8) TMI 1163 - AT - Central Excise

SSI exemption - use of brand name - respondents were clearing unbranded cookies and cookies bearing the brand name Cookie Man - Revenue was of the view that that the cookies sold in paper plate and in napkins are also to be treated as branded cookies as the buyer buying such cookies from the outlet are aware that the cookies sold loosely is only Cookie Man cookies and that they are the very same item that are sold in packs, denying the benefit of N/N. 8/2003 dated 01.03.2003 on these cookies - whether the respondents are eligible for the benefit of SSI exemption on the cookies sold loose in their outlets? - Held that - In the respondent s own case, the Hon ble Apex Court has held that the respondents would not be eligible for the benefit of SSI exemption even for the cookies sold in loose from their outlets - assessee are having an exclusive shop in Spencer Plaza complex and they are the license holder of the brand Cookie Man outlet as per the agreement with Cookie Man Pty. Ltd., Australia - demand upheld - appeal allowed - decided in favor of Revenue.

Summary

Issues:
Whether the respondents are eligible for the benefit of SSI exemption on cookies sold loose in their outlets.

Analysis:
The respondents were engaged in the manufacture of cookies and cleared them under Central Excise Tariff heading 1905.11. They sold branded cookies, loose cookies in empty boxes, and loose cookies in paper plates and napkins. The department contended that cookies sold in paper plates and napkins should be treated as branded cookies and not eligible for exemption under Notification No.8/2003. A show cause notice was issued, and after due process, duty demand was confirmed. In appeal, the Commissioner held that the respondents were eligible for the SSI exemption. However, the department argued that a similar case had been decided in their favor by the Tribunal. The issue was whether the respondents qualified for the SSI exemption for loose cookies sold in their outlets. The respondents had an exclusive shop and a license agreement with a brand. The Apex Court ruled that even cookies sold loose from their outlets were not eligible for the SSI exemption.

The Tribunal held that goods need not be stamped with a brand name to be considered branded under the SSI notification. The circumstances surrounding the sale were crucial, and selling the same branded cookies in different forms did not change their branded nature. The environment in which the goods were sold was considered, and the presence of the brand name in the business operations was sufficient to classify the cookies as branded, even if not physically stamped with the brand name. The Tribunal found that the cookies sold without the brand name inscription still maintained a clear connection with the brand and could not claim exemption under the SSI Notification. Consequently, the demand was upheld, the impugned order was set aside, and the Order-in-Original was restored, allowing the appeal filed by Revenue.

In conclusion, the Tribunal ruled in favor of the Revenue, holding that the respondents were not eligible for the SSI exemption on cookies sold loose in their outlets, as the cookies maintained a clear connection with the brand name under which they were manufactured and sold.