1990 (1) TMI 82 - HC - Central Excise

Summary

Issues:
Interpretation of Notification No. 175/86-C.E. for exemption eligibility based on brand name/trade name affixation.
Applicability of the exemption to manufacturers or job workers under Central Excise Act.
Impact of Explanation VIII on exemption claim.
Effect of stencilling details on components for brand name/trade name usage.

Detailed Analysis:
The judgment concerns two writ petitions seeking a mandamus to allow members to benefit from Notification No. 175/86-C.E. to clear goods duty-free. The dispute arises from a change in procedure by a manufacturing company, affecting ancillary units' tax liability under the notification. The court notes the absence of a reply affidavit from the respondents, implying no dispute over the facts presented. The issue revolves around the application of the exemption notification to the petitioners based on the facts provided by the respondents.

The relevant portion of Notification No. 175/86-C.E. is cited, specifying conditions for exemption related to brand names or trade names affixed to goods. The petitioners argue for exemption based on previous court judgments deeming them manufacturers rather than job workers. However, the Additional Central Government Standing Counsel relies on Explanation VIII of the notification to counter this claim, emphasizing the significance of brand name/trade name usage in determining exemption eligibility.

The court acknowledges the petitioners' manufacturing status but highlights the impact of stencilled details on components, indicating a connection between the goods and the contracting party. The court finds that the stencilling constitutes the use of a brand name or trade name as per Explanation VIII, thereby disentitling the petitioners from the exemption. The change in component procurement method further supports this conclusion, leading to the dismissal of the writ petitions based on the application of the notification and Explanation VIII.

In conclusion, the court rules against the petitioners, emphasizing the importance of brand name/trade name usage as per the notification's explanation. The judgment underscores the significance of factual details and their alignment with legal provisions in determining exemption eligibility under Central Excise laws.