2014 (7) TMI 145 - AT - Central Excise

Benefit of small scale exemption Notification Nos. 1/93 and 8/99 - Use of brand name of other person - Held that - invoices issued by the appellant show the brand name in some cases and do not reflect upon the use of brand name in some cases. If the appellant was using the brand name in respect of all the goods manufactured by them, they would have reflected the same in all the invoices and there was no reason for them to reflect the use of brand name in some of the invoices and to abstain from mentioning the same in other invoices. This fact clearly reflects upon the fact that brand name was only used wherever they are mentioned in the invoices. As such, we agree with the learned advocate that wherever invoices are showing the brand name, the benefit of small scale exemption notification is to be denied only in those cases. As the same requires factual verification and examination, which exercise can be done only at the original stage level, we set aside the impugned order and remand the matter to the original adjudicating authority for doing the said exercise and for requantifying the appellants duty liability. - Decided partly in favour of assessee.

Issues:
1. Entitlement to small scale exemption under Notification Nos. 1/93 and 8/99 based on the use of a brand name belonging to another person.
2. Applicability of small scale exemption to goods manufactured without any brand name.
3. Failure of Commissioner (Appeals) to consider the appellant's plea regarding the use of brand name only on certain goods.

Analysis:
1. The judgment addresses the issue of entitlement to small scale exemption under Notification Nos. 1/93 and 8/99 based on the use of a brand name belonging to another person. The demands were raised against the appellant for using the brand name of another person in the manufacture of C I shafts and water circulator pumps, leading to a denial of the exemption benefit. The appellant's advocate acknowledged that the brand name belonged to the father of the appellant's proprietor. However, it was argued that goods manufactured without any brand name should still be eligible for the exemption.

2. The appellant contended that they also manufactured goods without using the brand name, which should qualify for the small scale exemption. The appellant had submitted a letter to the Commissioner (Appeals) detailing the distinction between goods manufactured with and without the brand name. The Commissioner (Appeals) failed to consider this submission and instead relied on the proprietor's admission of using the brand name, assuming it was used on all manufactured goods. However, the invoices issued by the appellant reflected the brand name in some cases but not in others, indicating selective use of the brand name.

3. The Tribunal observed that the presence or absence of the brand name on the invoices indicated that it was not uniformly used on all goods manufactured by the appellant. Therefore, the benefit of the small scale exemption should only be denied for goods where the brand name was specifically mentioned. As factual verification was necessary to determine the applicability of the exemption on a case-by-case basis, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for further examination and recalculating the duty liability based on the actual usage of the brand name on the manufactured goods.

In conclusion, the Tribunal's decision focused on the nuanced application of the small scale exemption concerning the use of a brand name belonging to another person and emphasized the importance of factual verification to determine the eligibility for the exemption based on the actual usage of the brand name on the goods manufactured by the appellant.

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