1999 (5) TMI 239 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 175/86-C.E. regarding eligibility for duty exemption based on brand ownership.
2. Burden of proof on the department to establish ineligibility for benefit of the notification.
3. Ownership of the brand name affixed on goods and its impact on duty liability.

Analysis:

Issue 1: Interpretation of Notification No. 175/86-C.E.
The appellant, a manufacturer of stamp pads and ink, used the brand name 'DEEPEE' owned by a trader, besides their own brand 'Supreme'. The dispute arose as to whether goods with 'DEEPEE' brand should have been cleared without duty payment under Notification No. 175/86-C.E. The appellant argued that the term 'person' in para 7 of the notification should refer to a manufacturer, not a trader. However, the department contended that since the brand belonged to a trader, the duty exemption did not apply. The Tribunal, relying on precedent, upheld the duty demand, considering the circumstances akin to a previous case.

Issue 2: Burden of Proof
The appellant argued that the burden of proof regarding the ineligibility for the notification rested on the department, citing a Supreme Court judgment. However, the department asserted that since the brand owner was a trader, as admitted by the appellant's partner, the burden was met. The Tribunal found the facts clear, stating that the ownership of the brand by a non-eligible person was sufficient to trigger the notification's provisions, leading to the duty confirmation.

Issue 3: Ownership of the Brand Name
The appellant contended that the 'DEEPEE' brand belonged to them, not the trader, but failed to provide evidence supporting this claim. The department relied on the partner's admission during an official visit. The Tribunal, considering the lack of evidence to the contrary, upheld the ownership attribution to the trader and affirmed the duty liability. The penalty imposed was reduced based on the circumstances of the case.

In conclusion, the Tribunal dismissed the appeal, confirming the duty amount but reducing the penalty. The judgment emphasized the importance of ownership verification of brand names for duty exemption eligibility under relevant notifications, highlighting the burden of proof and the impact of brand ownership on duty liability.