1973 (11) TMI 43 - HC - Central Excise

Summary

Issues:
Interpretation of Entry 22D and Notification Annexure "A" regarding excise duty exemption on ready-to-wear apparel sold under a brand name.
Whether goods manufactured and marketed without a brand name are liable to excise duty exemption.
Validity of the requirement for the petitioner to de-register their trademark to claim exemption.
Applicability of the proviso in the notification regarding the duty exemption.

Detailed Analysis:
The petitioner, a partnership firm selling readymade garments under the brand name "MEBRO," sought exemption from excise duty under a notification exempting all readymade garments except those sold under a registered brand name. The firm applied for a license and clearance of goods, but the Superintendent of Central Excise insisted on duty payment due to the brand name registration. The petitioner contended that goods without a brand name should be exempt from duty as per the notification. Respondent No. 1 argued that as long as the petitioner retained the registered brand name, duty was applicable, even for goods without the brand name. The central issue revolved around the interpretation of the notification and the requirement for a brand name for duty exemption.

The notification exempted ready-to-wear apparel falling under Item 22D from duty, with a proviso excluding goods sold under a brand name. The court analyzed the notification and concluded that goods without a brand or trade name were exempt from duty. The petitioner's claim that goods without a brand name should be duty-free was deemed valid under the notification's provisions. The court rejected the argument that duty applied as long as the petitioner retained the registered brand name, emphasizing that goods without a brand name were exempt from duty as per the notification's intent.

The court addressed an injunction application allowing clearance of goods not bearing the brand name upon depositing the duty amount, refundable if the petitioner succeeded. It ruled in favor of the petitioner, granting the right to clear goods without a brand name and rejecting the requirement to de-register the trademark for duty exemption. The judgment clarified that the petitioner did not need to de-register the trademark to claim exemption for goods without a brand name. The respondents were directed to bear the costs of the petition, and the rule was made absolute in favor of the petitioner.