2024 (7) TMI 183 - AT - Central Excise

Sale of branded goods or not - gold bars and gold/silver coins - no logo, trademark or brand name affixed on the above said items - liability to pay duty in terms of N/N. 01/2011-CE. dated 01.03.2011 - HELD THAT - On going through the entry 89, it is found that articles in relation to gold shall mean anything (other than ornaments), in a finished form, made of, or manufactured from or containing, gold and includes any gold coin and broken pieces of an article of gold but does not include primary gold, that is to say, gold in any unfinished or semi-finished form including ingots, bars, blocks slabs, billets, shots, pellets, rods, sheets, foils and wires. Admittedly, the main demand in the present case against the appellant is for sale of gold bar, which is specifically excluded as per the Explanation given in the said Entry. Therefore, the gold bars, which is primary gold, sold by the appellant, are not excisable goods and consequently, no duty is payable by the appellant. Gold coins and silver coins - HELD THAT - There is no logo, trademark or brand name affixed/embossed on these articles - On going through the pictures it is found that there is no mark indicating brand name on the gold / silver coins and therefore, it cannot be considered that these are branded goods. In these circumstances, on these gold / silver coins, the appellant is not liable to pay duty in terms of Sl. No. 89 of Notification No. 01/2011-C.E. dated 01.03.2011. The decision relied upon by the Ld. Authorized Representative for the Revenue in the case of Australian Foods India (P) Ltd. 2013 (1) TMI 330 - SUPREME COURT is not applicable to the facts of this case as, in this case, there is a specific Circular issued by the respondent vide Circular F. No. 354/38/2011-TRU dated 02.03.2012 which clarified that ' It is clarified that the excise duty leviable on precious metal jewellery, manufactured or sold under a brand name, is attracted only on such jewellery on which the trade/brand name or any such mark or symbol or even a number which is cross referred with such trade/brand name ((not being a house mark used by jewellers for identification of jewellery at the time of exchange/resale) is indelibly marked or embossed. If such brand name is not affixed or embossed on the jewellery or article itself but appears on the packing such as the jewellery box or pouch or even on the warranty card or certificate of quality, such goods will not be treated as branded jewellery and thus will not be liable to excise duty.' Thus, no duty is payable by the appellant. Consequently, no penalty can be imposed on the appellants. The impugned order set aside - appeal allowed.

Summary

Issues:
1. Central Excise Duty demand against the main appellant.
2. Applicability of Notification No. 01/2011-C.E. dated 01.03.2011 on the sale of gold bars, gold coins, and silver coins.
3. Imposition of penalties on the appellants.

Analysis:
1. The case involved an appeal against an order confirming the demand of Central Excise Duty against the main appellant, a jewelry producer and seller, for the period from March 2011 to March 2013. The appellant also sold gold bars, gold coins, and silver coins. The appellant procured gold bars of 0.995 fineness from a specific bank and sold them after cutting into various sizes. The appellant contended that since no logo, trademark, or brand name was affixed on the items, they were not liable to pay duty.

2. The investigation led to a Show Cause Notice alleging duty liability based on Notification No. 01/2011-C.E. dated 01.03.2011, claiming that the goods were sold under the brand name "SENCO GOLD." The impugned order confirmed the duty demand, stating that the goods were sold under the brand name, making them liable for duty. The appellant challenged this decision, arguing that the absence of brand markings exempted them from duty under the notification.

3. The Tribunal analyzed the notification's provisions, particularly Sl. No. 89, which exempted primary gold from excise duty. The gold bars sold by the appellant were considered primary gold, and thus not excisable goods, relieving the appellant from duty payment. Regarding gold and silver coins, as there were no brand markings, the Tribunal concluded that they were not branded goods and hence not subject to duty under the notification. The Tribunal also referenced a circular clarifying that brand markings must be indelibly present on the goods themselves to attract duty.

4. Relying on the circular and the specific provisions of the notification, the Tribunal held that the appellant was not liable to pay duty on the gold bars, gold coins, or silver coins. Consequently, no penalties could be imposed on the appellants. The impugned order was set aside, and the appeals filed by the appellants were allowed.

This detailed analysis highlights the key legal arguments, interpretations of the notification, and the Tribunal's reasoning leading to the decision in favor of the appellants.