2008 (1) TMI 141 - AT - Central Excise

SSI exemption - there is no dispute that in the instant case the container in which the goods (paint) are presented for assessment, does not carry the brand name of another person - brand name Sheenlac belonging to the appellant s marketing agency was affixed only on the secondary packing - Secondary packing was used only for convenience of transportation & is not reckoned for the purpose of determining the AV for levy of duty SSI exemption u/not. 1/93 & 16/97 allowed

Summary

Issues:
1. Interpretation of SSI Notifications No.1/93 and No. 16/97 regarding exemption eligibility when another person's brand name is affixed on goods.
2. Application of the prohibition on SSI benefit to goods carrying another person's brand name.
3. Consideration of brand name on secondary packing for SSI exemption eligibility.
4. Invocation of extended period of limitation for non-declaration of use of another person's brand name.
5. Comparison of judicial decisions in cases involving different types of goods.

Issue 1 - Interpretation of SSI Notifications:
The case involved M/s. Supercoat Industries, which affixed the brand name "SHEENLAC" on cartons containing paints not belonging to them, leading to a demand for duty. The appellants argued their belief in SSI exemption eligibility despite the brand name issue. Reference was made to a Tribunal decision indicating the possibility of bona fide belief under similar circumstances.

Issue 2 - Application of Prohibition on SSI Benefit:
The main argument was whether the SSI benefit prohibition applied only to primary packing or also to cartons containing goods. The appellants contended that since the brand name was on the cartons, not the paints themselves, SSI exemption should apply. They cited a Tribunal decision supporting the exclusion of marks not directly related to the goods for excise law purposes.

Issue 3 - Consideration of Brand Name on Secondary Packing:
The judgment analyzed the Notification No. 16/97 provision stating that goods bearing another person's brand name are ineligible for SSI exemption. It was established that the brand name "Sheenlac" was on secondary packing, not the primary tins containing the paints. Following the legal principle from a previous case, it was concluded that marks not integral to the levy should be disregarded, leading to the allowance of the appeal.

Issue 4 - Invocation of Extended Period of Limitation:
The appellants argued against the invocation of an extended period due to non-disclosure of using another person's brand name. Citing a Tribunal decision upheld by the Apex Court, it was concluded that non-declaration did not warrant the imposition of an extended period for limitation.

Issue 5 - Comparison of Judicial Decisions:
The submission by the Ld. SDR highlighted distinctions in cases favoring the assessee using another person's brand name, emphasizing the nature of goods involved. The judgment carefully considered the period of ineligibility for SSI exemption based on the brand name issue, ultimately setting aside the demand and penalties imposed, and allowing the appeal by M/s. Supercoat Industries.