2018 (1) TMI 624 - AT - Central Excise

Demand of Duty @ 1% on gold and silver jewellery - use of brand name - distinction between brand name and house mark - case in dispute is that medallion of gold / silver and other articles of silver have been cleared bearing only the house mark. The brand name Sanchi belonged to MMTC has not been embossed on any of these items and this fact is not in dispute - Held that - In the CBEC circular No. B-1/3/2011 TRU dated 25.3.2011, issued at the time of introduction of 1% duty, it has been clarified that, only such jewellery or other articles of precious metals which either bear or are marketed and sold under a brand name attract this levy. Whether a particular name or mark or symbol etc. is a brand name or not is a matter of fact, and can be ascertained from the manner in which it is understood in commercial or trade parlance. The test of goods being branded would be if the buyer seeks to buy the goods because they bear or are sold under a particular brand. As such, a mere mark of identity put by a jeweller or the job worker, commonly known as a house mark shall not be considered a brand name. In the case the medallions of gold/silver only the house mark MMTC Logo is applied on the articles. The brand name Sanchi is not appearing either on the articles or packing. Hence, Central Excise duty of 1% will be not payable on each goods - In the case of silver articles, it is on record that such articles bear the house mark but are sold with the brand name which appears in the packing material. Consequently, such articles are to be considered as sold with the brand name and hence will attract the levy of 1% in terms of notification. The appellant has stated, that the department has taken wrong sales figures. He has submitted the CA certificate supporting the correct sale figure as per records - the matter needs to be remanded to the adjudicating authority for requantification of the demand taking into account the correct turnover. Appeal allowed by way of remand.

Summary

Issues:
- Dispute over levy of 1% duty on articles sold with a brand name
- Differentiation between house mark and brand name
- Plea for rectification of sales figures
- Time bar plea dismissed
- Remand for requantification of demand

Analysis:

The appeal was filed against Order-in-Original No. 37/2014 concerning the levy of 1% duty on articles sold with a brand name between 1.3.2011 to 6.3.2012. The appellant, a public sector enterprise, sold silver/gold coins and articles of silver during this period. The appellant argued that their 'Sanchi' trademark was not used on the coins and only appeared on the packing box of articles. The 'MMTC' logo, a house mark, was used on the items for purity and weight guarantee, but it was not registered as a brand name. The appellant cited various cases to distinguish between a house mark and a brand name.

Regarding quantification of the levy, the appellant disputed the total sales value considered by the department, providing a Chartered Accountant certificate supporting a lower figure. The appellant also raised a plea that the demand was time-barred. The department contended that the 'Sanchi' brand name was sought for registration and excise duty was collected and deposited. The department argued that the 'MMTC' logo was a house mark used consistently by the appellant.

The Tribunal found that the appellant sold medallions and silver articles with the 'MMTC' house mark. Referring to legal precedents, the Tribunal distinguished between a brand name and a house mark, emphasizing that a house mark is not necessarily a brand name. The Tribunal noted that the duty was payable only on goods sold with a brand name as per the relevant notification. It was clarified that a mere house mark does not constitute a brand name for levy purposes.

The Tribunal remanded the matter for the quantification of demand based on the correct turnover, restricting the duty to silver articles sold with the brand name on the packing box. It was highlighted that the duty demand of 1% had been withdrawn by the Government post the disputed period. Consequently, the impugned order was modified, and the appeals were partly allowed, taking into account all the facts and circumstances presented during the proceedings.