9911796707
TMI Blog2003 (8) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... called skiving. The end fitting of metal, is then inserted inside the hose and then pressed using a machine which enables the end fittings to be permanently attached to the hose. (b) A substantial part of the hose assembly is cleared by the appellants to the original equipment manufacturers like Bharath Earth Movers Ltd., MICO, M/s. Hindustan Motors Ltd. These manufacturers manufacture items like Earth Moving equipment, Hydraulic float power system etc. the small portion of the hose assembly, is cleared to other customers, which are used as parts of equipments. (c) The hose, as procured, in running length has the brand name or logo of the supplier. For instance the goods imported by the appellant from M/s. Dunlop Hydraulic Hose Ltd. have the logo of the said company on the rubber hose. (d) The appellants have been selling the hose assembly under the brand name of Uniflex. The appellants were pasting a sticker showing the brand name Uniflex on all the hose assemblies. The sticker also was bearing the words Licence : Dunlop Hiflex with a logo. 3. (a) They were issued with show cause notices proposing to demand differential duty by denying the exemption, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods supplied by the foreign supplier the question of using a brand name of foreign supplier in respect of goods manufactured by the appellants does not arise and accordingly, benefit of Small Scale Exemption cannot be denied. (d) In the de novo proceedings, the Commissioner re-adjudicated the case, initiated by the Show Cause Notices by observing as follows :- 12. In addition to the above, three more SCNs in continuation of the period involved in the above SCN for the period 1-4-1996 to 31-3-1997 involving a total duty of Rs. 6,24,941/- issued by the Superintendent of Central Excise, Mahadevapura Range, Bangalore which were also confirmed together by the Assistant Commissioner of Central Excise, Bangalore IV Division, Bangalore vide his Order No. 68(a)/98, dtd. 15-6-1998 (C.No.V/40/15/131/97) and upheld by Hon ble Commissioner (Appeals) on being appealed against by the assessee and further appealed to the Hon ble Tribunal, who vide its Final Order No. 928/2001 has remanded the matter to the concerned adjudicating authority to decide the issue afresh and to give clear finding on factual position. 13. On the request of the assessee vide his letter, dtd. 1-8-2001 and in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight endfittings and left endfittings. In the endfittings, the buyers part number as indicated in the purchase order are engraved together with our company s brand name - UF-UNIFLEX. Engraving of part number is necessary to identify the hose assemblies at customers end for correctly using these hose assemblies for a particular finished goods. Each hose assembly manufactured by us is assigned a part number code by us. Same is also reflected in our invoices. The first alphabet used in the part number represents the make of the hydraulic hose such as - D for Dunlop, A for Alfagomma, W for Markwel, and L for Superseal etc. Subsequent codes indicate the length, the size, right endfittings and left endfittings etc. (b) The markings on the Hose Assembly are : According to Mr. P. Duraiswamy, Assistant Manager, FGS, Yuken India Ltd., (as per his statement, dtd. 18-11-95) covering the supplier of our hose assembly. The specification is SAE 100 R1A Q20 X 1 MTR Long Hose Assembly with the endfittings with Dunlop make hose marked 1625 Pulselife) 15 on the hose. On verification it is found that one endfitting the following engraving having made with 1.1/4 X Rl X 1 Mtr UF Uniflex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as UF and on the right hand side corner of the sticker a monogram is affixed and below the monogram, it is written as HIFLEX . (ii) On verification of the stock of hose assemblies supplied by M/s. UFL to M/s. Yuken India Ltd., it was found the hose assembly was bearing a sticker with the description UNIFLEX Licence Dunlop HIFLEX Universal Flexibles (P) Ltd., Bangalore - 560 048. Phone: 510878 and a monogram on the righthand side. Similar verifications were conducted at M/s. BEML, Mysore, M/s. Bhaskar Dynamics, Bangalore, M/s. Lincoln Helios (India) Ltd., Bangalore and M/s. MICO, Bangalore who have procured Hose Assemblies from M/s. UFL and it was found that the hose assemblies were affixed with sticker Uniflex Licence Dunlop Hiflex. 6. From the above, it appears that M/s. UFL, Bangalore have been using the brand name and logo Dunlop Hiflex England on their products and stationery used for all correspondences. The goods packed in polythene tube bearing the markings UF UNIFLEX HIGH PRESSURE HOSES LICENCE : DUNLOP HIFLEX, ENGLAND and the hose assemblies are again bundled with Yellow colour polythene sticker strips on which it is printed as UF UNIFLEX (R) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bare hose cannot be used unless it is processed as being processed by the assessee, as a component part in any of the machines..... ...Same is the case of bare hose and the product hose assembly made out of the hose. Both are different identifiable, separate useable and marketable products. One can understand that new product has not come into existence by the process of manufacture if the only bare hose can be put to use as a replacement of the hose assembly. The bare hose cannot be used unless it is fitted with the end fitting after the necessary process carried on as to use hose assembly as component part of the machinery... No serious challenge to this finding of the Commissioner is or could be made. Therefore, it is beyond doubt, that a completely new different product emerges viz., Hose, Assembly and duty was required to be charged once again in such goods. The goods being marketed are Hose Assembly and not Hoses . Therefore, markings on raw material i.e. Hoses is not relevant for consideration of the issue herein. (e) From the factual position of the markings observed on the Hose Assembly and charges for denial of the SSI exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants were using a sticker on the hose assembly with the brand name Dunlop Hiflex and on facts they are found to have marked many more things including prominently their own name and brand. (ii) On being pointed out that the words Dunlop Hiflex was not the brand name of Dunlop, England, and that the appellants were not using the brand name of Dunlop, England, the Commissioner in the impugned order finds and agrees that the word Hiflex is not a brand name. However, a new case appears to have been made by him, by holding that the appellants have used the logo Flying D of Dunlop on the cellophane tape used for tying bunches of hose assemblies which was seized at the premises of M/s. BEML which was not the allegation spelt in the notices. (iii) The Commissioner has thus, in the impugned order gone beyond the show cause notice inasmuch as it was never the case of the Department that the logo flying D was the brand name used by the appellants on the goods. The use of the logo Flying D either on the hose assemblies or on the sticker is not proved or alleged or found. It was only on the cellophane tapes, used for tying up the bunches of hose assemblies that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paste on the endfittings contained both the brand name Uniflex and the so called brand name of the foreign company along with notations of part numbers of the buyers. The use of one s own brand name need not be indicated to the Department. (v) As far as the indication of the brand name of the foreign company is concerned, the appellants plea of bona fide belief that since the foreign company does not come within the purview of the small scale notification, there is no requirement to inform the Department and this was the understanding even of the Department and the Tribunal is clear from the following : (vi) Letter dtd. 8-2-89 issued by the CCE, Belgaum to the Central Board of Excise and Customs expressing his opinion that benefit of notification cannot be denied if the brand name of a foreign company, which does not have a factory in India is used. (vii) The appellate Tribunal in 1992 in the case of Fosroc Chemicals India Ltd. v. CCE - 1993 (65) E.L.T. 119 expressed the prima facie view that unless the brand name owner is in India, the benefit of Notification cannot be denied. This view was again expressed by the Tribunal in 1995 in the stay order in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... designs and goods are sold/despatched by using the part number. The indication of the word Uniflex is only to establish the identity of the supplier of the goods. Infact, the same sticker has both the words Uniflex and Hiflex with Uniflex being more prominent. It is therefore the submissions of the appellant that mere affixation of the logo on the goods is not sufficient and the marking must be for the purpose of indicating the relation in the course of trade between such goods and the person knowing such name. Reliance is found to be well placed by them on the decision of the Tribunal in the case of Emkay Investments Pvt. Ltd. v. CCE, Calcutta reported in 2000 (124) E.L.T. 741 (T) = 1998 (28) RLT 36. Since substantial part of the goods is supplied to O.E. Equipments manufacturer, the use of a brand name on these goods is not hit by mischief of Para 7 in view of the proviso to Para 7/4 of the notification. During the year 1994-95 and 1995-96 value of clearances of more than Rs. 75 lakhs was made of the O.E. Equipments itself. In such a situation, no differential duty would become payable. That the appellant had not followed the Chapter-X Procedure cannot come in the way of appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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