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TMI Blog2015 (10) TMI 1569X X X X Extracts X X X X X X X X Extracts X X X X ..... VANIJYA PVT LTD M/s JANAKALYAN VINIMAY PVT LTD M/s AGARPARA JUTE MILLS LTD M/s NORTHBROOK JUTE CO LTD M/s ANGUS JUTE WORKS M/s ADITYA TRANSLINK PVT LTD M/s DALHOUSIE JUTE CO M/s AUCLAND INTERNATIONAL LTD M/s KANKNARRAH CO LTD M/s EMPIRE JUTE CO LTD M/s ALLIANCE MILLS LESSEES LTD M/s THE NAIHATI JUTE MILLS CO LTD M/s KAMARHATTY COMPANY LTD M/s AMBICA JUTE MILLS LTD M/s TEPCON INTERNATIONAL INDIA LTD M/s RDB TEXTILES LTD M/s PRABARTAK JUTE MILLS LTD Versus COMMISSIONER OF CENTRAL EXCISE, KOL-III (SL NO 1-20, 25-30, 34) COMMISSIONER OF CENTRAL EXCISE, KOL-IV (SL NO 21, 22, 23, 24, 33) COMMISSIONER OF CENTRAL EXCISE, KOL-II (SL NO 31-32) For the Appellants : Shri Dr Samir Chakraborty, Sr. Adv. J P Khaitan, Sr. Adv. K P Dey, S Bagaria, P Banerjee, Adv., D K Saha, S P Siddhanta, Consultants For the Respondents : Shri D K Acharya, Spl Counsel, S Sharma, Commr(AR) ORDER Per: D M Misra: The aforesaid Appeals are directed against respective orders of the Commissioner of Central Excise, Kolkata. Since the issues involved are common, therefore, all these Appeals are taken up together for disposal. 2. Suffice it would be, if the facts of one of the appellant, namely, M/s. Hooghly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications and the appellant was mandatorily required to specify in each of the said jute bags, the name, monogram as well as marking specified therein and/or specified by DGS & D. Further, from time to time DGS & D issued requisition orders for supply of jute bags and it was effecting the purchase for and on behalf of various State Governments/State Government agencies viz. FCI and others. 5. It is his submission that as per the orders of the jute Commissioner, the colours, emblem, the name of the manufacturing mill (Appellant) and BIS certification, including license number etc. are required to be printed on the bags which have been erroneously considered by the department as brand name as envisaged in the exemption notification ignoring the fact that these are required to be printed as per direction contained in the orders issued in terms of powers under statutory provisions and non-compliance with the said requirement would result prosecution under the Essential Commodities Act, 1955. It is his further submission that there is no connection in the course of trade between the subject goods and either DGS & D or the concerned State Government/Govt. agencies or FCI. The jute bags m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in the case of CCE vs. Grasim Industries Ltd. - 2005(183) ELT 123(SC), CCE vs. Ace Auto Component Ltd. - 2011 (263) ELT 3(SC), Terai Food Ltd. vs. CCE - 2006 (198) ELT 323(SC) and CCE vs. Australian Foods (India) Pvt.Ltd. - 2011 (287) ELT 385 (SC). The ld. Advocate also referred to the Circular No. 947/8/2011-CX dated 21.7.2011 issued by CBEC. 7. The ld. Sr. Advocate placed strong reliance on the decision of Supreme Court in Arasmita Captive Power Co. Pvt. Ltd. vs. Lafarge (India) Pvt.Ltd. 2013 (15) SCC 414 in support of his submission that the principle for understanding the ratio decidendi of a judgement has been emphasized in the said case at paragraph 33, 34 and 35 of the said judgement. It is his submission that the ratio laid down by the Hon'ble Supreme Court in the case of Kohinoor Industries vs. CCE - 2005 (188) ELT 3(SC) is not applicable to the facts of the present case. 8. The ld. Sr. Advocate distinguishing the decision of Hon'ble Supreme Court in Kohinoor Industries' case submitted that the observation of Supreme Court in the said case was made in the background of the facts of that case and in no manner whatsoever negates or overrules the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of trade between the chapter 63, and the person using the brand name. 12. Further, he has submitted that the name of the procurement agency and its emblem do not constitute a brand name in relation to the product of chapter 63, namely, jute sacks/ bags. The printing on the bags has to be viewed in its entirety. The purpose of such printing is merely to show the identification, the name and emblem of the procurement agency which are required to be mentioned along with crop year and name of the food grain. Such particulars clearly relate to the product to be packed in the bags and having nothing to do with the jute bags themselves. The particulars printed on the bags not related to any manufactured product of chapter 63, but to the agricultural produce and the procurement agency of the state/central Govt. involved in its distribution. Such agency admittedly does not trade in chapter 63 goods and the question of its having any brand name in relation to the goods of chapter 63 does not arise. There is no trade in the bags at the hands of the agency or even thereafter. It is submitted that particulars of the agricultural produce to be packed in the bags and those of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand in the Appeal No.E/75872/2014 relating to M/s Aditya Translink Pvt. Ltd. is bad in law as the demand included for the period after March 2013. 15. Similar submissions also advanced by Shri N.K.Chowdhury appearing for Appellant RDB Textiles. Also, he has submitted that a portion of the demand is barred by limitation. Shri K.P.Dey, for Trend Vyapaar Ltd. & others. Also subscribed to the above arguments of the senior advocates. Further he has submitted that in view of the Larger Bench decision in the case of M/s Prakash Industries vs. Commissioner - 2000 (119) ELT 30(Tri-LB), the demand is not sustainable. 16. Per contra, Shri D.K.Acharya, ld. spl. Counsel for the Revenue submitted that the present issue is: whether exemption under amending Notification No.12/11 dated 01.3.2011, further amended by Notification No.30/11-CE dated 24.3.2011, applicable to the jute bags classified under tariff heading 6305 of CETA,1985 and printed with particulars of other persons. He has submitted that as per these Notifications all jute bags (except the laminated ones under tariff heading 6305), other than those bearing a brand name or sold under a brand name, are eligible for exemption. 17. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e strip running along the length of the bags with additional identification markings of two consecutive blue warp threads at a given distance. Such monogram/emblem do indicate a connection between the product and a person like 'FCI' or 'Raipur Vipanan Sangha' or 'Govt. of Punjab' in the course of trade between the appellant M/s. Hooghly Infrastructure Pvt. Ltd. and DGS & D. Thus, all the ingredients of brand name are present in the given case. He has contended that this interpretation is further strengthened from the Notification No.8/2003-CE dated 01.3.2003. It is stipulated therein that the exemption contained in that Notification shall not apply to specified goods bearing brand name or trade name, registered or not of another person, but there are certain exceptions to the said condition also. For example, the specified goods even if bear brand name or trade name of i) Khadi & Village Industries Commission (KVIC) ii) State Khadi & Village Industry Board (SKVIB) iii) National Small Industries Corporation (NSIC) iv) State Small Industries Development Corporation (SSIDC) v) State Small Industries Corporation (SSIC) then also the SSI exemption could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and name' in the present case when the jute Commissioner describes the jute bags in question as branded, when DGS & D (traders/procurers) provides them to print the brand of FCI, Raipur Vipanan Sangha, Govt. of Punjab etc. and when the Govt. of India issues Notification accordingly, then the inevitable conclusion is that the jute bags are not eligible to exemption and there is no necessity to refer any case laws on the subject. However, he referred to the case laws namely Commissioner of C.Ex., Delhi vs. ACE Auto Comp. Ltd. - 2011 (263) ELT 3 (SC), Kohinoor Elastics Pvt.Ltd. vs. CCE, Indore - 2005 (188) ELT 3 (SC), Commissioner of C.Ex., Chennai-II vs. Australian Foods India (P) Ltd. - 2013 (287) ELT 385 (SC). 20. Supporting the aforesaid argument, the ld. A.R. (Commissioner) Shri S.Sharma for the Revenue has submitted that the DGS & D, Kolkata in its procurement order dated 28.9.2011 had referred to the description of the brand and also the branding charges of Rs. 15/- per 100 bags to be paid as extra in addition to the ex-factory prices. It is his submission that when the DGS & D itself acknowledges that the jute bags are branded and necessary branding charges are recovered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods of the description specified in column (3) of the Table below and falling within the Chapter, heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), specified in the corresponding entry in column (2) of the said Table, from whole of the duty of excise leviable thereon under the said Central Excise Act: Provided that nothing contained in this notification shall apply to the goods in respect of which credit of duty on inputs or capital goods has been taken under the provisions of the CENVAT Credit Rules, 2002,- Table S. No. Chapter or heading No. or sub heading No. Description of goods (1) (2) (3) 1. 50.04, 50.05 All goods 2. 51.05, 5106.11, 5106.12, 5106.13, 5107.11, 5107.12, 51.08, 51.09, 51.10, 51.11, 51.12 All goods 3. 52.04, 5205.11, 5205.19, 5206.11, 5206.12, 52.07, 52.08, 52.09 All goods 4. 53 (except 53.01, 53.03, 5305.31, 5305.39, 5306.90, 53.07, 5308.11 and 5308.90) All goods 5. 54.01, 54.04, 54.05, 54.06, 54. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 30/2004-C.E., dated 9-7-2004] Textiles and Textile articles - Amendment to Notification No. 30/2004-C.E. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 30/2004-Central Excise, dated the 9th July, 2004 published in the Gazette of India, Extraordinary, vide G.S.R. 421 (E), dated the 9th July, 2004, namely:- In the said notification,- (i) in the opening paragraph, in the proviso, for the figures "2002", the figures "2004" shall be substituted; (ii) in the TABLE, for S.No. 16 and the entries relating thereto, the following S.No. and entries shall be substituted, namely:- (1) (2) (3) "16. 61, 62 and 63( except 6309 00 00 and 6310) All goods, other than those bearing a brand name or sold under a brand name" [Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured by the Appellant and classifiable under Chapter Heading 6305, printed with some particulars of other person, could be considered as bearing a brand name or sold under a brand name. The expression "bearing a brand name or sold under a brand name" is not defined under any of the aforesaid Notifications, therefore, its meaning has to be understood as defined at chapter note (iv) of chapter 63 of CETA, 1985, which reads as under:- (iv) In relation to products of this Chapter, "brand name" means a brand name, whether registered or not, that is to say, a name or a mark, such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to a product, for the purpose of indicating, or so as to indicate, a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identify of that person'; 23. The facts of the case are not in dispute. The appellant are manufacturer of jute bags used to affix/print certain particulars on the jute bags viz. the mills name, manufactured in India, buyer's name, logo, year of manufacture, BIS mark with license number etc.. It is the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Such exemption notification must be strictly construed and the assessee should bring himself squarely within the ambit of the notification. No extended meaning can be given to the exempted item to enlarge the scope of exemption granted by the notification." 19. This principle has been reiterated time and again. It is not necessary to take note of all such cases. We would however like to reproduce the restatement of this member by the Constitutional Bench of this Court in Commissioner of Central Excise, New Delhi v. Hari Chand Suri Gopal & Ors. - (2011) 1 SCC 236 = 2010 (260) E.L.T. 3 (S.C.), as follows: "29. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the notification cannot be extended to the manufacture of branded jute bags. Also, it is argued by the revenue that the jute bags are branded cannot be disputed by the appellants inasmuch as while calculating the price of the jute bags, branding charges @Rs.15/- per hundred bags, has been included in the cost of the jute bags. 28. In support of their respective arguments both sides have referred the following leading judgments of the Hon'ble Supreme Court viz. Tarai Food Ltd. Vs. CCE, 2006 (198) ELT 323(SC) (ii) CCE Vs. Grasim Industries Ltd. (iii) CCE Vs. Australian Foods India Pvt. Ltd. 2013 (287) ELT 385 (SC), and Kohinoor Elastics Pvt. Ltd. Vs. CCE 2005 (188) ELT 3(SC). 29. In Tarai Food Ltd.'s case (supra) the issue before the Hon'ble Supreme Court was whether 'French Fries' should be classified under sub-heading 2001.10 or 2001.90 . The appellant in that case were manufacturers of French Fries and sold the same sometimes under the brand name 'Inland Valley' and sometimes without such name. Those packets which contain the brand name of 'Inland Valley' were cleared on payment of duty under tariff heading No.2001.10 and the packets whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inted with other's name, logo etc. and there is no dispute on the said facts. 32. However, reading the judgement of the Hon'ble Supreme Court in the case of Kohinoor Elastics Pvt. Ltd.'s case (supra), we see the observations/principles laid down therein would be more relevant to determine the present issue as in the said case their Lordships while deciding the legal issues raised before it had analyzed the judgement of the Larger Bench of the Tribunal in Prakash Industries vs. Commissioner - 2000 (119) ELT 30(Tri-LB) involving facts more or less similar to the present one. Therefore, it is relevant to visit the facts of the Prakash Industries' case first before venturing to discuss the principle laid down in Kohinoor Synthetics' case. 33. The facts in issue in Prakash Industries' case was that the appellants therein were manufacturers of HDPE sacks solely for the supply to M/s Orissa Cement Ltd. on which they had printed/affixed the brand name of the buyers. The Appellant claimed the benefit of SSI exemption Notification No.175/86-CE dated 1.3.1986. On reference of the issue, whether the Appellant are eligible to the said exemption, the Larger Bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d strong reliance upon Explanation IX set out hereinabove. He submitted that the words "that is to say" qualify the words "Brand name" or "Trade name". He submitted that Explanation IX thus makes it clear that the brand name or the trade name must have been used so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark. He submitted that a brand/trade name has significance only because it conveys to the customer in the market a connection between the product and some person. It was strenuously submitted that the words "so as to indicate a connection in the course of trade" make it clear that the brand/trade name must be used on goods which ultimately reach a customer. He submitted that a brand/trade name has relevance only because the customer associates the product bearing the brand/trade name with a person. He submitted that in this case the customers associated the brand/trade names (used by the Appellants) not with the elastics (which never reached the market) but with undergarments manufactured by the Appellants customer. He submitted that the elastic manufactured by the Appellants was never sold in the market an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacturer, in this case the Appellant, who is applying/affixing the brand/trade name on the goods. Thus the words "for the purpose of indicating" refers to the purpose of the manufacturer (Appellant). The "course of trade" is of that manufacturer and not the general course of trade. Even if a manufacturer only manufactures as per orders of customer and delivers only to that customer, the course of trade, 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. Now in this case there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d down that the goods manufactured need not be sold to the customers, but even if it is used captively by the person whose brand name has been used, the manufacturer would not be eligible to the benefit of the said notification. 37. The appellants have vehemently argued that the said judgment is not applicable to the present case for the reason that it has been delivered in the context of availing of the benefit under SSI exemption notification where the intention of the Government was not to allow the SSI benefit to be availed by large manufacturer in an oblique or indirect manner. We are not impressed with the said argument of the Advocates for the appellants inasmuch as the Notification in Kohinoor Elastics' case refers to the exemption from levy of excise duty on the goods manufactured and the said exemption was allowed only if the goods does not bear a brand name/trade name of another person or sold under a brand name. Reading the conditions of the said Notification and the exemption notifications under dispute, we find more or less similar words/expressions have been used in both the notification which have been interpreted and settled by the Hon'ble Supreme Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been engaged in manufacturing and clearing such branded jute bags which are exempted before 01.03.2011 and the exemption was restored w.e.f. 01.3.2013 to such manufacturers. Therefore, we set aside the impugned Order to the extent of imposition of penalty and also confirmation of the demands, wherever extended period of limitation has been invoked. In such cases, the duty however, should be computed for the normal period of limitation. Besides, we also find that the computation of demand has been challenged by the appellant; the ld. sr.Adv. Dr. Samir Chakraborty has submitted that their grievance on the excessive demand has not been addressed and if the computation of demand is properly carried out, then it would be drastically reduced. In support of his submission he has submitted a chart to show the errors. Shri S.Bagaria, Ld. Adv. argued that even after issuance of exemption Notification 11/2013CE dt. 01.3.2103, the period thereafter has been included in computation. Therefore, we are of the opinion that the computation of the demand in M/s Hoogly Industries' case and in all other cases, wherever such dispute has been raised, need to be addressed by the adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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