1990 (4) TMI 59 - HC - Central Excise

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 175/86-C.E.
2. Interpretation of clause 7 read with Explanation VIII of the Notification.
3. Validity of markings or inscriptions on components as brand name or trade name.
4. Entitlement to refund of duty paid under interim measures.

Summary:

1. Eligibility for exemption under Notification No. 175/86-C.E.:
The appellants sought a Writ of Mandamus directing the respondents to permit their members to avail the benefit of Notification No. 175/86-C.E., dated 1-3-1986, and to clear their goods without payment of duty. The Notification provides exemption to goods produced by small scale industrial undertakings. The Units, ancillary to Bharat Heavy Electricals Limited (BHEL), were denied exemption on the ground that clause (7) read with Explanation VIII of the Notification was applicable to the components they manufactured.

2. Interpretation of clause 7 read with Explanation VIII of the Notification:
The learned single Judge opined that stencil marks on the components manufactured by the Units indicated a brand name or trade name of BHEL, thus disqualifying them from exemption. However, the High Court found that the markings or inscriptions on the components (quantity, weight, work order number, product number, ancillary Unit Firm code number, and destination) did not constitute a brand name or trade name of BHEL. The markings were used by the Units, not by BHEL, and did not indicate a connection in the course of trade between the components and BHEL.

3. Validity of markings or inscriptions on components as brand name or trade name:
The High Court concluded that the markings or inscriptions did not fall within the mischief of clause 7 read with Explanation VIII of the Notification. The inscriptions did not constitute a name or mark such as symbol, monogram, label, signature, or invented word of BHEL. The markings were used by the Units for contractual purposes and did not indicate a connection with BHEL in the course of trade. Therefore, the exemption under the Notification should not be denied based on these markings.

4. Entitlement to refund of duty paid under interim measures:
The High Court allowed the writ appeals, setting aside the common order of the learned single Judge and granting the writ petitions. The Units were entitled to avail the exemption under the Notification for components bearing only the specified markings or inscriptions. Consequently, the Units were entitled to a refund of the duty paid under interim measures, and the personal bonds furnished as security for the balance of two-thirds of the duty were to be canceled.

The High Court refused the oral leave to appeal to the Supreme Court, stating that the issues were decided based on well-accepted norms of interpretation of an exemption Notification and did not involve any substantial question of law of general importance.