2006 (11) TMI 204 - SC - Central Excise

As rightly contended by learned counsel for the respondents, the plea relating to non-applicability of extended period of limitation has not been considered by the CEGAT. Therefore, the matter is remanded and the above issue alone will now be considered by the CEGAT. Appeal allowed.

Summary

Issues:
1. Eligibility for exemption under Notification No. 175/86-C.E.
2. Interpretation of brand name in the context of exemption eligibility.
3. Application of extended period of limitation.

Eligibility for exemption under Notification No. 175/86-C.E.:
The case involved respondents manufacturing Brass Sanitary Bathroom fittings seeking exemption under Notification No. 175/86-C.E. Initially, the Collector, Central Excise denied the exemption due to the use of the brand name "ARK" belonging to another entity. The CEGAT remanded the matter to determine the eligibility of the brand owner under the notification. The Additional Commissioner later confirmed the duty demand, citing non-eligibility of the brand owner for the exemption. On appeal, the Commissioner (Appeals) held that the respondents, being registered as an SSI unit, had complied with the conditions of the notification, and the extended period of limitation was not applicable.

Interpretation of brand name in the context of exemption eligibility:
The Revenue challenged the decision, arguing that even if the brand owner was a manufacturer, they should still manufacture the specified goods to qualify for exemption. The CEGAT endorsed the Commissioner (Appeals) view without addressing the extended period of limitation. The stand of the appellant was that the small scale industry must manufacture the specified goods to be entitled to exemption, which was contested by the respondents, supporting the CEGAT's view.

Application of extended period of limitation:
The CEGAT's decision was based on the interpretation that the manufacturer need not be the manufacturer of the specified goods, as long as the brand name used was entitled to the exemption. However, the Supreme Court held that the notification was 'goods specific,' emphasizing the importance of the manufacturer's eligibility for exemption concerning the specified goods. The Court also noted that the issue of extended period of limitation was not addressed by the CEGAT, leading to a remand of the matter for further consideration solely on this issue.

In conclusion, the Supreme Court allowed the appeals without costs, remanding the matter to the CEGAT for a specific consideration of the extended period of limitation issue, while emphasizing the importance of the manufacturer's eligibility for exemption under the specific notification.