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2016 (4) TMI 603 - AT - Central ExciseManufacture - assembling of imported and indigenous telephone parts - SSI exemption - adjudicating authority demanded excise duty and allowed SSI exemption benefit cum duty benefit and the cenvat credit on the inputs - Held that - It is seen that the assessee supplied the Basic wired telephones to the TATA INDICOM who isonly a Telecom service provider and not engaged in manufacture of any excisable goods with Brand name and not registered under Central Excise. The telephone sets supplied by the appellant are not traded or sold to customers but are only rented to the customers while giving telephone connections to their customers. Further the Hon ble Supreme Court decision of Kohinoor Elastics Pvt. Ltd. (2005 (8) TMI 115 - SUPREME COURT OF INDIA) relied by the revenue pertains to the Brand name of goods per se when the goods are sold and the Brand name / Trade name has connection with goods and the persons in the ordinary course of trade. In the present case TATA INDICOM is the name of the Telephone Service Provider and does not relate to any excisable goods sold by the service provider in the ordinary course of trade. Therefore, the Apex Court s decision is distinguishable and does not relate to the present case. Whereas we find that, the Boards Circulars dated 27.10.1994, 1.9.1994, 18.1.2000 are validly existing during the disputed period and the adjudicating authority rightly relied on the Circular dated 27.10.2014 wherein it is clarified that so long as the goods are supplied to the customer for further manufacture are not traded , the benefit of SSI exemption should not be denied, merely on the ground, that it contains brand name of another unit. The said Circular was valid till 1.9.98 and is binding on the Revenue during the material period and the adjudicating authority rightly followed the said circular. It is pertinent to state that after the apex Court s decision in Kohinoor Elastics Pvt. Ltd. case the government amended the SSI notification vide Notification 47/2008 dt.1.9.2008 allowing SSI benefit to specified goods bearing the brand name of others. In effect, the Board s circular has been brought in the statue itself. Therefore, there is no merit in the impugned order in allowing SSI exemption benefit on the goods bearing the name of TATA INDICOM. Further the appellants imported all the parts of telephone set including the outer cover, packing materials and the said parts already bearing the name of TATA INDICOM . This confirms that the appellant, have not affixed the brand name TATA INDICOM while clearing the said goods and the revenue s plea that the overseas supplier embossed the name as per the direction of the appellants is not relevant and not acceptable. Therefore, the Hon ble Supreme Court s decision in the case of Collector Vs Vimal Printery 1999 (9) TMI 957 - SUPREME COURT is squarely applicable to the present case and the adjudicating authority has rightly relied on the above judgement in his order. In view of the above facts, we hold that the Telephones cleared by the appellants bearing the name of TATA INDICOM to the telephone service provider does not amount to usage of other s Brand to attract para-4 of SSI notification and we do not find any infirmity in the impugned order to the extent of allowing SSI exemption benefit to the goods cleared bearing the name of TATA INDICOM . The revenue appeal is liable to be rejected. Denial of SSI exemption on the goods bearing the name of SANTEL is a brand name of other manufacturers or not - Held that - The appellants are entitled to SSI exemption benefit on the goods cleared with brand name of SANTEL . Having held that the appellants are eligible for SSI exemption for the goods bearing SANTEL and TATA INDICOM , we find that the value of clearance for the years 2002-2003 to 2005-06 are well within the SSI exemption limit, therefore demand of Excise duty does not arise. Consequently the imposition of penalty goes. Accordingly the impugned order is liable to be set aside.
Issues Involved:
1. Whether the assembly of telephone parts amounts to "manufacture" under Section 2(f) of the Central Excise Act, 1944. 2. Whether replacing RSP stickers with MRP labels on imported telephone instruments and fax machines amounts to "manufacture" under Section 2(f)(iii) of the Central Excise Act, 1944. 3. Whether the use of the brand name "TATA INDICOM" on assembled telephone instruments disqualifies the appellant from SSI exemption benefits. 4. Whether the demand is time-barred and if penalties are imposable. Issue-wise Detailed Analysis: I) Assembly of Telephone Parts as "Manufacture": The Commissioner held that assembling telephone parts amounts to "manufacture" under Section 2(f) of the Central Excise Act, 1944. The appellants contended that their activities did not constitute "manufacture" as they were merely assembling imported parts. However, the adjudicating authority found that the appellants imported parts and assembled them into finished telephone instruments, which falls under the definition of "manufacture" as per Section 2(f)(iii) of the Central Excise Act, effective from 1.3.2003. This was supported by the fact that the appellants declared the goods as parts in their import invoices and bills of entry, proving that they did not import complete telephone instruments in CKD or SKD condition. The adjudicating authority's decision to classify these activities as "manufacture" was upheld. II) Replacing RSP Stickers with MRP Labels: The Commissioner also held that replacing RSP stickers with MRP labels on imported telephone instruments and fax machines amounts to "manufacture" under Section 2(f)(iii) of the Central Excise Act. This section includes activities such as packing, repacking, labeling, and relabeling as "manufacture." The appellants' activities of altering MRP stickers on imported goods fall within this definition, and thus, the duty demand on such activities was justified. III) Use of "TATA INDICOM" Brand Name and SSI Exemption: The Commissioner allowed SSI exemption benefits for telephone instruments bearing the "TATA INDICOM" brand name, which was contested by the Revenue. The adjudicating authority found that "TATA INDICOM" is not a brand name identified with any goods of another person, but rather a service provider's name. The Supreme Court's decision in Kohinoor Elastics Pvt. Ltd. was deemed not applicable as it pertained to brand names of goods, whereas "TATA INDICOM" is a service provider's name. The Board's circulars valid during the disputed period supported this view, and the adjudicating authority correctly allowed SSI exemption benefits. IV) Limitation and Penalties: The appellants argued that the demand was time-barred and that there was no suppression of facts. However, the adjudicating authority found that the appellants were not registered with the Central Excise and failed to file any declaration for SSI exemption, which justified the invocation of the extended period under Section 11A. The Supreme Court's decisions in Eagle Flask Industries Ltd. and BPL India Ltd. supported the view that failure to register and file declarations indicated an intention to evade duty. Consequently, the demand and penalties imposed were upheld. Separate Judgments: 1. Appeals E/700, 701, 702/2007: The impugned order dated 24.7.2007 was upheld, and the appeals were dismissed. 2. Revenue Appeal E/736/2007: The impugned order dated 24.7.2007 was upheld, and the revenue appeal was rejected. 3. Appeals E/624, 625, 626/2009: The impugned order was set aside, and the appeals were allowed with consequential relief. 4. Appeal E/627/2009: The appeal was partly allowed with consequential benefit after adjusting the revised duty, interest, and penalty. 5. Appeal E/628/2009: The appeal was allowed. Conclusion: The Tribunal upheld the classification of the appellants' activities as "manufacture" and the corresponding duty demands, while also affirming the applicability of SSI exemption benefits for goods bearing the "TATA INDICOM" brand name. The demands were not time-barred, and penalties were justified. Appeals were disposed of accordingly.
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