2004 (11) TMI 194 - AT - Central Excise

Summary

Issues:
Whether M/s. Pilot Products were clearing excisable goods bearing the brand name of another person.

Analysis:
The issue in these appeals was whether M/s. Pilot Products were clearing excisable goods manufactured by them bearing the brand name of another person. The Revenue contended that M/s. Pilot Products manufactured desert coolers under the brand name "PILOT," which belonged to another entity, and that the small scale exemption benefit was incorrectly granted to M/s. Pilot Products. The Commissioner (Appeals) had allowed the benefit of small scale exemption based on a decision of the Larger Bench of the Tribunal. However, the Supreme Court in a subsequent judgment clarified that the small scale exemption notification did not require the same goods to be manufactured by both the brand name owners of the small scale industry. The Supreme Court emphasized that the purpose of the exemption was to benefit industries without a brand name advantage. The Tribunal, following the Supreme Court's judgment, held that the Central Excise duty demanded from M/s. Pilot Products was payable, but no penalty was imposable due to differing judicial views on the interpretation of the notification.

The Tribunal considered the submissions from both sides and noted that the exemption to small scale industries is subject to fulfilling specified conditions, including not affixing excisable goods with the brand name of another person. In this case, M/s. Pilot Products were manufacturing desert coolers bearing the brand name "PILOT," which was confirmed to belong to another entity using it since 1968. The Tribunal applied the Supreme Court's interpretation of the small scale exemption notification, which clarified that the brand name owner did not need to use the same goods to attract the exemption's provisions. The Tribunal emphasized that the notification aimed to benefit industries without a brand name advantage and held that the Central Excise duty demanded from M/s. Pilot Products was payable. However, considering the issue revolved around the interpretation of the notification and the existence of conflicting judicial views, no penalty was imposed on M/s. Pilot Products. Thus, the appeals were disposed of in these terms.