2022 (2) TMI 304 - AT - Central Excise

Benefit of exemption from excise duty - benefit of N/N. 12/2012-CE dated 17.03.2012 as per Sl. No. 200 - manufacture of gold coins bearing a brand name of others - Department opined that the appellant manufactured gold coins bearing a brand name of others and thus gold manufactured by them attract 1% duty in terms of Notification No.12/2012-CE dated 17.03.2012 as per Sl. No. 200 - Department confirmed the duty only on the premise that the appellants have manufactured branded jewellery - HELD THAT - What the adjudicating authority has lost sight of is the fact that though the appellants have inscribed/embossed the name of the customers as well as Govt. of Tamil Nadu and Chettinad Cements Corporation Pvt. Ltd., it could not be said to be a brand‟ used in connection of trade and commerce engaged by the person. It is not the case of the department that either of the customers of the appellant is engaged in the trade and gold coins bearing their brand. Therefore, the very concept of branding goods is not appreciated in a legal and proper manner. Admittedly, inscribed or embossed on the gold coins manufactured by the appellants have their customers is certain identification with the respective customers who have got the gold coins manufactured for distribution only and not for use as a merchandise. As long as the customers of the appellants are not engaged in the trade/commerce/business, inscription on the gold coins cannot said to have in connection in the course of trade with the product manufacture. As long as the goods are not sold by the customers of the appellant in the brand name which they are manufactured, the same cannot be held bearing brand name making them dutiable. Therefore, as the appellants have not manufactured branded jewellery, the exemption contained in the said notification is applicable to them and the impugned order is not legally sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Notification No. 12/2012 for exemption eligibility regarding duty on gold coins bearing brand names of others.

Detailed Analysis:

Issue 1: Interpretation of Notification No. 12/2012 exemption eligibility
The appellant, a manufacturer of gold coins, faced a duty claim for manufacturing coins bearing brand names of other entities. The department contended that the coins attracted 1% duty under Notification No.12/2012-CE. The appellant argued that the symbols were for identification purposes only, not for trade connection. The appellant relied on CBEC clarification and various judgments supporting their stance. The department confirmed duty based on branding, overlooking the absence of trade connection with the entities' brand names.

Issue 2: Examination of Branding Concept
The Tribunal analyzed the inscriptions on the gold coins manufactured for the Government of Tamil Nadu and a private corporation. It noted that the coins were not meant for trade but for distribution to beneficiaries or as incentives. The Tribunal emphasized that branding requires a trade connection, which was lacking in this case. Referring to relevant case laws, the Tribunal highlighted that branding must enhance a product's value in trade, which was not the purpose here. The Tribunal concluded that as long as the customers did not sell the coins under their brand names, the coins could not be deemed as bearing brand names, making them exempt from duty.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal and providing consequential reliefs. The judgment clarified that the inscriptions on the gold coins were for identification purposes only and did not establish a trade connection with the entities' brand names. The Tribunal's decision emphasized the legal requirement of branding to involve a trade connection for goods to be considered as bearing brand names.