2000 (3) TMI 458 - AT - Central Excise

Summary

Issues:
- Duty confirmation against the appellants for not being entitled to small scale exemption due to brand name affixed on leather footwears.
- Dispute regarding brand name affixation by appellants or West Bengal State Leather Industries Development Corpn. Ltd.
- Interpretation of agreement clauses to determine responsibility for affixing brand name.
- Examination of evidence regarding brand name affixation and recovery of goods from the premises.

Issue 1: Duty confirmation for not being entitled to small scale exemption:
The judgment confirms duty imposition of Rs. 46,304.13 (basic) and Rs. 2,315.20 against the appellants due to the brand name 'Charmaja' affixed on leather footwears, owned by West Bengal State Leather Industries Development Corpn. Ltd. The appellants were deemed ineligible for small scale exemption under Notification No. 175/86.

Issue 2: Dispute over brand name affixation:
The consultant for the appellants acknowledged that affixing 'Charmaja' brand name would disqualify them from the exemption. However, the appellants argued that the brand name was affixed by the State Corpn., not by them, as per the agreement terms. They contended that they only manufactured the shoes without affixing the brand name.

Issue 3: Interpretation of agreement clauses:
The judgment analyzed the agreement clauses and found no provision indicating that the appellants were not responsible for affixing the brand name. Clause 10 specified that the appellants were to deliver finished footwears with the brand name to customers as directed by the Corpn., indicating that the appellants sold the footwears with the brand name affixed.

Issue 4: Examination of evidence and recovery of goods:
The judgment noted that the appellants failed to provide evidence that the brand name was not affixed by them. Seizure of leather footwears with the brand name from the appellants' premises contradicted their claim. The recovery memo indicated that the goods were found in the area under the appellants' control, leading to the conclusion that the appellants manufactured and affixed the brand name, making them ineligible for the exemption.

In conclusion, the judgment upheld the duty confirmation against the appellants, ruling that they were manufacturing footwears with the 'Charmaja' brand name, which rendered them ineligible for the small scale exemption under Notification No. 175/86.