1998 (9) TMI 192 - AT - Central Excise

Summary

Issues:
- Applicability of Notification No. 175/86-C.E. to aerated waters with a brand name of another person.
- Burden of proof on eligibility for exemption under Notification No. 175/86-C.E.
- Requirement of registration with Directorate of Industries for small scale units.
- Exclusion clause in Para 7 of Notification No. 175/86-C.E.

Analysis:
1. Applicability of Notification: The appellants manufactured aerated waters under a brand name owned by another person and claimed the benefit of Notification No. 175/86-C.E. The Revenue issued a show cause notice alleging ineligibility due to affixing the brand name of a person not entitled to the concession. However, the Revenue failed to provide evidence supporting this claim. The appellants, on the other hand, presented the balance sheet showing the brand name owner's turnover, indicating eligibility for the exemption based on the turnover being below the prescribed limit. The lower appellate authority rejected this argument citing the lack of a registration certificate for the brand name owner with the State Authorities.

2. Burden of Proof: The appellants contended that the brand name owner's clearances were within the prescribed limit, as evidenced by the balance sheet, making them eligible for the Notification No. 175/86-C.E. They argued that the relaxation provided in the notification negated the necessity of registration with the Directorate of Industries for the brand name owner. The Revenue, represented by the JDR, reiterated the lower appellate authority's findings, emphasizing the requirement of registration for small scale units.

3. Exclusion Clause and Onus of Proof: The Tribunal analyzed Notification No. 175/86-C.E., noting that while it provided exemptions, Para 7 excluded certain goods and manufacturers from its benefits. The Revenue's show cause notice was based on this exclusion clause, shifting the burden of proof onto the Revenue to establish the appellants' ineligibility under Para 7. The Tribunal found that the Revenue failed to meet this burden, as the appellants demonstrated the brand name owner's status as a small scale manufacturer eligible for the exemption, even without registration with the Directorate of Industries. Consequently, the appeal was allowed solely on this ground, without delving into other issues such as the party responsible for affixing the brand name.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellants based on their eligibility for the exemption under Notification No. 175/86-C.E. The judgment highlighted the importance of fulfilling the requirements specified in the notification and the burden of proof resting on the Revenue to establish ineligibility under exclusion clauses.