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Issues:
Challenge to Central Excise duty assessment based on brand name usage and assessable value determination. Analysis: The petitioners, a partnership firm manufacturing electrical appliances, entered into an agreement with another company for the supply of water heaters under a brand name. The dispute arose when the Central Excise Collectorate considered the prices charged by the other company as the assessable value for excise duty assessment. The petitioners contended that the mere usage of the brand name did not make the other company the manufacturer of the goods. The court referred to precedents, including the Supreme Court and High Court decisions, emphasizing that the exclusive supply to a company and affixing the brand name to the goods did not establish manufacturing ownership. The court held that the assessment based on the other company's prices was erroneous, quashing the orders confirming the show cause notices and the detention memos. The Department argued that the challenge was limited to post-agreement orders and did not cover any claims prior to the agreement. Additionally, the Department highlighted pending appeals against the impugned orders and the delay in their disposal. However, the court upheld the petitioners' claim, citing the erroneous nature of the orders and the established legal principles from higher courts. The court also clarified that the petitioners' refund applications were not part of the current petition and should be addressed separately based on existing laws. Consequently, the court quashed the impugned orders and detention memos, with no costs imposed on the petitioners and discharging the bank guarantee provided by them. In conclusion, the court ruled in favor of the petitioners, emphasizing that the usage of a brand name alone does not determine manufacturing ownership for excise duty assessment. The judgment nullified the erroneous orders and detention memos, providing relief to the petitioners while directing the separate consideration of refund applications in accordance with the law.
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