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TMI Blog2018 (3) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... by Section 135 of Finance Act, 2003 read with clause 127 of Finance Bill, 2003 in the 3rd Schedule of Central Excise Act, 1944 the goods of Chapter 85 of the Central Excise Tariff Act are included from Sr. No. 22 to Sr. 94 and the appellant are also covered by the said provisions. The other issue involved is that the appellant is manufacturing the said electrical goods under the brand name of CONA , which as per the search conducted by the investigation agency, that trade mark authority found that CONA brand is registered brand name of M/s. CONA Industries, Mumbai, therefore the appellants are not entitle for the SSI exemption available under the Notification No. 8/2001-CE dated 1-3-2001. It was also observed that the assessment of goods falling under sub heading 85.36 was subjected to the provision of Section 4A of the Central Excise Act, 1944 i.e. MRP based assessment, therefore while computing turnover of the goods falling under sub heading 85.36 assessable, value to be arrived at after allowing specified abatement from the MRP. Accordingly, a show cause notice was issued proposing demand of Rs. 68,62,812/- and Education Cess amounting to Rs. 73,115/- under Section 11A(i), denia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He submits that the brand name CONA is jointly owned by M/s. SK Enterprises and M/s. Sony Enterprises for trading any electrical parts, fitting and all the said firms are registered with TMR to the above effect. In response to the letter dated 31-10-2007 under RTI Act from Shri. Suresh & Co., the Public Information officer in the trade mark registry vide letter No. TMR/RTI/05/395/07-08/960 dated 8-11-2007 has informed that the trade mark CONA stands in the name of M/s. SONY Enterprises, as substantiated from the copy of the history details is enclosed with the appeal paper. He submits that in view of the above evidences, department s contention that brand name CONA belong to another person is factually incorrect as the appellants are also owner of the said brand hence they are eligible for SSI exemption under the relevant notification. In this regard he placed reliance on the following judgments: (a) 2004(172) ELT 192(T) Mamma Products (b) 2004(165)ELT 463(T) Geo Engg. Works (c) 2003(158) ELT 499(T) Elex Knitting Machinary Co. (d) 2005(180)ELT 500(T) Anil Pumps (e) 2007(214)ELT 12 1(T) Bothara Agro Equipments It is his submission that since the brand name CONA was assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the issue of limitation, he submits that demand for the period 1-4-2001 to 31-3-2006 is barred by limitation as show cause notice was issued for the period beyond normal period of one year, every factual position was within the knowledge of the department. By letter dated 6-4-1998 addressed to the Jurisdictional Asstt. Commissioner Central Excise, appellant informed the details of their activity and claimed that in absence of any section of chapter note such activities do not amount to manufacture, hence, question of payment of duty does not arise. They further vide their letter dated 10-11-2000 informed to the Asstt. Commissioner Central Excise regarding their receipt of unbranded electrical goods in bulk; that affixing of CONA brand name owned by the them; by either labelling or embossing or stamping or affixing metallic labels; that labelling, packing and testing did not amount to manufacture; that they had already informed, vide their letter dated 6-4-1998. However, the duty paid branded goods had been seized by the Preventive Officers on 7-11-2000 and 8-11-2000 on the ground that there was assembly and packing, which amounts to manufacture; that by their letter dated 20-11- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant was subsequently undergone processes of quality checks, affixing of brand name and packing it into new container. Only after these processes the goods become complete and finished, therefore as per note 6 the goods sold by the appellant is manufactured in their hand, hence liable to duty. He further submits that w.e.f. 1-3-2003 packing activity is also amount to manufacture in terms of IIIrd schedule of the Central Excise Act, 1944. As regard the brand name issue, he submits that appellant was not the owner of the brand, M/s. CONA industries was the brand owner. As regard the assignment in favour of the appellant regarding brand name, he submits that mere assignment would not make the appellant, the owner of the brand, in this regard he placed reliance on the Tribunal decision in case of Vee Gee Faucets Pvt. Ltd Vs. Commissioner[2010(259) ELT 273 (Tri. Delhi)]. 6. We have carefully considered the submissions made by both sides and perused the records. 7. In the present case the issues before us to decide are as under: (a) Whether the activity of quality checks, branding with CONA brand and packing of electrical parts and fittings received in loose condition amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... packing of the goods for marketing purpose. These processes cannot be said that it contributes for converting incomplete or unfinished goods to the complete and finished article for the reason that neither any further assembly is carried out nor any mechanical process which make a unfinished goods or incomplete product into complete and finished product. The product purchased by the appellant is already complete and finished. Merely a quality test, which is nothing but by connecting with the power plug for checking whether it is working or not but by this quality test there is no transformation of the product, which is already in the fully manufactured form, therefore all the electrical goods purchased by the appellant are completely in manufactured form, therefore in our considered view this so called activity of quality testing, branding and packing of the already manufactured goods will not be covered by note 6 of Section XVI of the Central Excise Tariff, therefore we hold that the appellant is not engaged in the manufacturing of the goods, they are only doing trading activity of bought out goods. 9. As regard the issue whether the appellant is owner of brand CONA and conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with CONA industries which has also not been proved, the ownership of CONA brand with appellant cannot be rejected. Therefore allegation of the Revenue on this count completely fails. As regard the Vee Gee faucets Pvt Ltd (supra) relied upon by the Ld. A.R., we find that fact in the said case is different from the facts in the present case. In the present case brand name owned by the grandfather of the present proprietor who is legal heir/successor. Moreover, in the present case trade mark registry has granted registration to the present appellant w.e.f. 10-12-1996. The Tribunal judgment in case of Vee Gee Faucets Pvt. Ltd. (supra) cannot said to be a good law for the reason that Hon'ble Supreme Court dealing with the similar facts in case of Dament chemicals(supra) held that trade mark will have retrospective effect from the date of use therefore the judgment in case of Vee Jee Fausets(supra) is distinguished. As per the discussion made herein above, we hold that appellant is owner of the brand CONA and consequently entitle for the SSI exemption. 11. As regard the limitation, whether the demand is time barred or otherwise, we find that the show cause notice dated 19-6-2006 iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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