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TMI Blog2010 (11) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption under Notification No. 8/2003-C.E., dated 1-3-2003. 3. According to Revenue, the mark "Bharti Airtel" printed on the goods was not brand name and the goods were not branded goods in the light of Board's Circular No. 71/71/94-CX., dated 20-7-94 as Bharti Airtel is not the brand name but is the name of a company and the goods are not traded in the market. Therefore, para 3(a) of the exemption Notification No. 8/2003-C.E., dated 1-3-2003 was not applicable and the value of clearances made to Bharti Airtel Ltd. could not be excluded while determining the aggregate value of clearances of all excisable goods for home consumption for 2006-07 and in view of this, the aggregate value of clearances of all excisable goods during 2006-07 would exceed Rs. 4 crores and the Appellant would not be eligible for SSI exemption during 2007-08. In the same manner the Appellant would not be eligible for SSI exemption during 2008-09. 4. With the above view of the matter, Revenue proceeded to issue show casue notice dated 8-5-2008 for the year 2007-08 and a show cause notice dated 25-3-2009 for the year 2008-09 proposing to club the branded and unbranded goods denying notification ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 having exceeded Rs. 1.5 crores whole clearance shall be leviable to duty. So also for the year 2008-09. Thus, the duty demand arose. There was also alternative claim by the learned Counsel that if there shall be liability, Cenvat credit should be allowed for the unprinted goods because of levy proposed by the department. It was also his further claim that the authority did not look to cum-duty aspect when they proposed to levy duty resorting to clubbing both printed and unprinted clearances. The authorities have found in the year 2005-06 that there were goods cleared with the mark as "Duraline" cleared to Duraline India (P) Ltd. No adjudication was done for that year. Learned Counsel placed para 9 to 11 appearing at page 4 & 5 of the adjudication order to demonstrate such view. 7. Shri Bipin Garg, learned Counsel further submitted that when the Department holds that any mark on the goods make the goods branded one and imposes duty, there cannot be any reverse view when the same norms were followed by the appellants for the years 2007-08 and 2008-09 which are under appeal. He invited attention to page 19 of the order-in-original to submit that there was no denial of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held that the wording of the notification does not allow the benefit of the exemption in this situation as the notification does not envisage a nexus between the manufacturer and the brand for it to attract the mischief of the brand name restriction. Accordingly, the mere affixation of brand name of another person is adequate to disqualify the goods for SSI exemption." Shri Garg, therefore, submitted that adjudication based on erroneous circular has no legs to stand and to support his arguments. He relied upon the following decisions :- (i) CCE, Trichi v. Grasim Industries - 2005 (183) E.L.T. 123 (S.C.); (ii) Kohinoor Elastics Pvt. Ltd. v. CCE, Indore - 2005 (188) E.L.T. 3 (S.C.); (iii) CCE, Trichi v. Rukmani Pakkwell Traders - 2004 (165) E.L.T. 481 (S.C.); and (iv) CCE, Chandigarh-I v. Mahaan Dairies - 2004 (166) E.L.T. 23 (S.C.) 9. Shri Garg submitted that when brand name goods cleared by a SSI unit are not eligible to exemption the appellant has correctly paid duty on branded goods without claiming SSI exemption. In respect of penalty levied on the company as well on the Director, learned Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrued to be trade name or brand name. Learned D.R. pleaded that the marking or inscription individually do not go to constitute name or mark to claim exemption. Learned D.R. further relied on the Tribunal's decision in the case of Srinisan Cable (P) Ltd. v. CCE, Hyderabad - 2000 (126) E.L.T. 1057 (Tri.) and also relied upon the decision in the case of Electro HMS (P) Ltd. v. CCE, Bangalore - 2000 (116) E.L.T. 265 (Tri.) to argue that mere fixation of a word on the product does not amount to use of brand name. 12. Heard both sides and perused the record. 13. There is no dispute by either side about the period involved in adjudication i.e. 2007-08 and 2008-09 during which the word "Bharti Airtel" was used by the appellants in pipes manufactured for Bharti Airtel Ltd. There is also no dispute that there was no allegation for use of brand name in the year 2006-07. It is also on record that the appellant is undisputedly an SSI unit. Manufacture of goods by the appellants for Bharti Airtel Ltd. and also Duraline India (P) Ltd. was known to the Department. The only dispute arose was as to whether the word "Bharti Airtel" appearing on pipes manufactured by the appellants for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e name of that customer. The framers were aware that such goods may not reach the market in the form in which they were supplied to the customer. The framers were aware that the customer may merely use such goods as an input for the goods manufactured by him. Yet Clause 4 provides in catagoric terms that the exemption is lost if the goods bear the brand/trade name of another. Clause 4 does not state that the exception is lost only in respect of such goods as reach the market. It does not carve out an exception for goods manufactured for captive consumption. The framers meant what they provided. The exemption was to be available only to goods which did not bear a brand/trade name of another. The reason for this is obvious. If use of brand/trade names were to permitted on goods manufactured as per orders of customers or which are to be captively consumed then manufacturers, who are otherwise not entitled to exemption, would get their goods or some inputs manufactured on job work basis or through some small party, freely use their brand/trade name on the goods and avail of the exemption. It is to foreclose such a thing that Clause 4 provides, in unambiguous terms, that the exemption i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for him is such manufacture and sale. In such cases it can hardly be argued that he has no trade. In fairness it must be stated that it was not argued that there was no trade. Such a manufacturer may, as per the order of his customer, affix the brand/trade name of the customer on the "goods" manufactured by him. This will be for the purpose of indicating a connection between the "goods" manufactured by him and his customer. In such cases it makes no difference that the "goods" as manufactured did not reach the market. The "use" of the brand/trade name was "in the course of trade" of the manufacturer for the "purpose of indicating a connection between the goods and the customer who used the brand/trade name". Clearly in such a case the exemption is lost. 16. Following the ratio laid down in Kohinoor Elastics case (supra) the "course of trade" of the present Appellant is making pipes for specified customers. It is also an admitted position that the Appellants are affixing the brand/trade name "Bharti Airtel" of their customers on the pipes. They are being so affixed because the Appellants and/or the customer wants to indicate that the "goods (elastic)" have a connection with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me so affixed brings goods and the user thereof to the proximity. When a customer wants brand/trade name affixed on the product is for his knowledge or to serve his interest. The whole intention behind affixing the word "Bharti Airtel" was to know the connection between the product and Bharti Airtel Ltd. The Small Scale Industry like the present appellant affixing the brand name on the goods opted to forgo SSI exemption benefit in respect of goods so affixed with the brand name "Bharti Airtel" and pay duty. Consequently, affixing of brand name "Bharti Airtel" is established in this case following the ratio laid down by Apex Court in Kohinoor Elastic case (supra). 18. Learned Counsel for the appellant relied on the decision in the case of CCE, Chandigarh-I v. Mahaan Dairies (supra). This judgment being on the aspect of selling of the goods using own brand name on the goods manufactured by Mahaan Dairies that judgment is of no help to the appellant. The judgment in Rukmani Packwell Traders (supra) relied on by the appellant is in the context of use of brand name of another person, whether registered or not. The case of the present appellant is in different context. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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