1998 (1) TMI 232 - AT - Central Excise

Summary

Issues: Revenue's appeal against denial of concessional rate of duty under Notification No. 175/86-C.E. for detergent products.

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the Revenue appealed against the Order of the Collector of Central Excise (Appeals), Ghaziabad, which held that the respondents were entitled to a concessional rate of duty under Notification No. 175/86-C.E. The case involved the manufacturing of detergent powder and cakes under specific brand names. The Revenue challenged the eligibility of the respondents for the concessional rate of duty based on the turnover of a separate unit using the same brand name for a different product. The Department issued Show Cause Notices proposing recovery of duty, which was confirmed by the Assistant Collector but overturned by the Collector (Appeals).

The main issue revolved around the interpretation of Notification No. 175/86 and whether the respondents were entitled to the concessional rate of duty. The Collector (Appeals) accepted the respondents' contentions, emphasizing that the brand name ownership for different products was held by separate entities, and there was no justification for combining turnovers to determine eligibility for the exemption. The Tribunal noted that both brand name owners were registered as small scale industries, making them eligible for the SSI exemption under the notification. The Tribunal highlighted that the exemption did not apply if the brand name was affixed by a manufacturer not eligible for the grant of exemption. Since the brand name owners were eligible SSI units, there was no basis for denying the benefit of the notification based on the turnover of another unit using the same brand name.

Ultimately, the Tribunal found no grounds to interfere with the Collector (Appeals) orders and upheld the decision, rejecting the Revenue's appeals. The judgment emphasized the importance of eligibility criteria under the notification and the need for the Revenue to demonstrate that the brand name owners were not eligible for the exemption, which was not established in this case.