2018 (8) TMI 787 - AT - Central Excise

SSI Exemption - use of Brand name of others - it was alleged that branded goods manufactured under the brand name Swaraj & Prakash which is owned by M/s Prakash Agriculture Industries, Agra - Held that - It is not the Revenue s stand that the appellant have cleared the said goods in the market and there is no evidence that the same have not been used by the brand name owners as original equipment. In the absence of any such suggestions by the Revenue, the denial of the Notification on the mere ground of non-observance of procedure is not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Small Scale Exemption Notification No.8/2003-CE - Compliance with Central Excise Rules 2001 for concessional rate of duty.

Analysis:
The case involved a small scale manufacturer who claimed the benefit of Small Scale Exemption Notification No.8/2003-CE but faced a demand notice due to manufacturing branded goods under the brand names 'Swaraj' and 'Prakash,' owned by another company. The Original Adjudicating Authority confirmed the demand, imposed interest and penalty, which was upheld by the Commissioner (Appeals), leading to the present appeal.

The appellant argued that the fuel tanks bearing the brand names 'Swaraj' and 'Prakash' were meant for use by the brand name owner in manufacturing diesel engines as original equipment for further goods production. They contended that this usage entitled them to the small scale exemption under clause 4(a) of the notification.

The lower authorities acknowledged that goods used as original equipment for manufacturing final products could qualify for exemption but denied the benefit to the appellant due to non-compliance with the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules 2001.

Referencing a previous Tribunal decision in a similar case, it was noted that the procedural lapse of not filing a declaration regarding the use of specified goods as original equipment should not hinder the appellant's entitlement to relief, especially when there was no doubt about the usage and clearances. The Tribunal emphasized that such a declaration was merely an intimation to the revenue and should not be a barrier to claiming benefits.

In the current case, the Revenue did not dispute the usage of goods as original equipment by the appellant's buyers, nor was there evidence that the goods were not utilized as intended. Therefore, the denial of the exemption solely based on procedural non-compliance was deemed unjustified. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief granted to the appellant.