2018 (2) TMI 1304 - AT - Central Excise

SSI Exemption - use of brand name of others - usage of brand name of client in the manufacture of plastic containers - N/N. 8/03 CE - Held that - Admitted fact is that brand name is for such packing material only. It is clear that bar of use of brand name will not apply in case the packing material which bear the brand name of another person who uses the said packing material either himself or by on behalf of himself - In the present case, brand is of packing materials itself and not the content thereof. Accordingly, we find that exclusion made by the amendment is not relevant to the present case. Following the normal consistent practice of imposing redemption fine of around 15% of value of confiscated goods, we find the redemption fine can be reduced to around ₹ 1,00,000/- - appeal allowed in part.

Summary

Issues:
1. Liability to pay Central Excise duty without availing small scale exemption under notification No.8/03-CE.
2. Interpretation of the amendment carried out on 29.4.10 regarding the exemption for specified goods bearing a brand name of another person.
3. Confiscation, redemption fine, and penalty imposed on the appellants.
4. Applicability of the amendment to the facts of the case.
5. Availability of Cenvat credit on capital goods and inputs.
6. Justifiability of the redemption fine imposed.

Analysis:
1. The dispute in the appeal revolves around the liability of the appellants to pay Central Excise duty without availing the small scale exemption under notification No.8/03-CE. The Revenue denied the exemption, alleging that the appellants used the brand name of another entity in manufacturing excisable goods, thereby disqualifying them from the exemption.

2. The key issue involves the interpretation of the amendment made on 29.4.10, which specified that the exemption would not apply to goods bearing a brand name of another person unless used as packing material by or on behalf of the brand owner. The appellants argued that the plastic containers they manufactured were used as packing material for a third party, justifying their eligibility for the exemption.

3. The appellants contested the confiscation, redemption fine, and penalty imposed on them. They argued that with the changed provisions post the 29.4.10 amendment, they believed they were not barred from availing the SSI exemption. Additionally, they highlighted that they had already discharged the full duty liability by utilizing Cenvat credit on capital goods and inputs.

4. The Departmental Representative (DR) contended that the amendment would not apply to the present case as the appellants manufactured branded packing material, distinct from the brand name of the contents. The DR emphasized that the packing material itself was branded and not the contents within it, leading to the conclusion that the appellants were ineligible for the SSI exemption.

5. The Tribunal analyzed the facts and the relevant legal provisions, concluding that the appellants were manufacturing branded goods under the client's brand name, thus disqualifying them from availing the SSI exemption. However, the Tribunal confirmed the availability of Cenvat credit on capital goods and inputs, as approved by the Revenue.

6. Regarding the redemption fine, the Tribunal deemed the initial amount excessive and reduced it to a more justifiable sum of around ?1,00,000, following the standard practice of imposing a fine of approximately 15% of the confiscated goods' value. Ultimately, the appeal was dismissed, except for the modification in the redemption fine amount.

This comprehensive analysis encapsulates the central issues, arguments presented, and the Tribunal's decision, providing a detailed overview of the legal judgment.