1998 (3) TMI 321 - AT - Central Excise

Summary

Issues: Interpretation of Notification 175/86 regarding affixing brand name, eligibility for small scale exemption, and applicability of exemption to specified goods.

In this case, the appeal arose from an Order-in-Appeal passed by the Collector of Customs and Central Excise (Appeals) in Pune, concerning the interpretation of paragraph 7 of Notification No. 175/86. The appellants, who were manufacturers of cylindrical blocks, were found packing the blocks in cartons bearing the brand name of other manufacturers and clearing them without duty payment. The Department contended that since the brand name owners were not eligible for the small scale exemption under the notification, the appellants were not entitled to the exemption as well. The Assistant Collector and the Collector (Appeals) both held that the appellants were not eligible for the exemption under Notification 175/86 due to the affixing of brand names on the cartons and failure to prove the eligibility of brand name owners for the exemption.

The appellants argued that paragraph 7 of Notification 175/86 was not applicable in their case as the brand name was affixed only on the cartons and not on the cylindrical blocks themselves. They relied on legal principles of strict interpretation of notifications and cited relevant case law to support their contention. However, the Collector (Appeals) observed that the practice of affixing brand names on containers rather than on the goods themselves was sufficient for the application of paragraph 7. The Tribunal agreed with the Collector (Appeals) that affixing the brand name on the container was not a ground to make the exemption inapplicable. The Tribunal emphasized that the purpose of a brand name could be achieved by displaying it on the packing material when affixing it directly on the goods was not feasible. Additionally, the Tribunal upheld the Department's argument that the onus was on the appellants to demonstrate the eligibility of the brand name owners for the exemption under Notification No. 175/86.

Ultimately, the Tribunal found no merit in the appeal based on the interpretation of Notification 175/86 and the application of paragraph 7. The appeal was dismissed, affirming the decision of the lower authorities regarding the ineligibility of the appellants for the exemption under the notification.