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TMI Blog2020 (2) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... ct may be resolved by a Larger Bench of the Tribunal. This Bench has, accordingly, been constituted. 2. Articles of jewellery falling under Heading 7113 of the Central Excise Tariff Act on which the brand name or trade name is indelibly affixed or embossed were subjected to Central Excise duty at the rate of 2 per cent. by notification dated 1 March, 2005. The Explanation to the notification provides that for the purpose of the notification, 'brand name or trade name' means a brand name or trade 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 identity of that person. 3. The Government of India, Ministry of Finance (Department of Revenue), Tax Research Unit, through a communication dated 4 March, 2005, in connection with the 2 per cent. Central Excise duty imposed on branded articles of jewellery of Heading 7113 of the Central Excise Tariff, pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, a Division Bench of the Tribunal at Chennai examined whether the mark/letters "Q" and "I" embossed on the jewellery manufactured and cleared by the appellant during the material period was a brand name or trade name chargeable to duty as "branded jewellery". The Tribunal observed that there was no dispute that the appellant was engaged in the manufacture and sale of jewellery with brand name "TANISHQ" which was one of the largest jewellery brand. When excise duty was levied on branded jewellery from March 1 March, 2005, the appellant discharged excise duty on branded jewellery bearing brand name of 'TANISHQ'. It also had another brand "GoldPlus" which was meant for semi-urban and rural customers. Subsequently, the appellant replaced the brand name "Tanishq" and 'GoldPlus" with marking "Q" and "I". The plea of the appellant that letters "Q" and "I" were embossed only for the purpose of identification of its product and not as a brand name, was not accepted by the Tribunal. The Tribunal observed that the appellant was a reputed branded jewellery manufacturer in India which cleared branded jewellery under brand names "Tanishq" & "GoldPlus" in the past but it had subsequently starte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed letters/alphabets "CKC" or "ABJ" on the jewellery manufactured by them for the appellants. This was a requirement to enable identification of the products made for the appellants and also to enable the appellants to identify the product after sale, if returned by customers. According to the appellant, these marks were also required to be affixed since hallmarking norms under the Bureau of Indian Standards mandated such identification for determining the standards of purity/quality/jeweller's identity. Both the appellants have BIS registration as hallmarked jewellery houses. 8. Having noticed the aforesaid activity of the appellants, it will be necessary to examine the relevant provisions. Chapter 71 of the Central Excise Tariff deals with Natural or Cultured Pearls, Precious or Semi-Precious Stones, Precious Metals, Metals Clad with Precious Metal, and articles thereof; Imitation Jewellery; Coin. The portion of Chapter 71 relevant for the purpose of this Appeal is reproduced below :- "CHAPTER 71 Natural or Cultured Pearls, Precious or Semi-Precious Stones, Precious Metals, Metals Clad with Precious Metal, and articles thereof; Imitation Jewellery; Coin Notes : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 9. Under the sub-headings of Heading 7113, the rate of duty prescribed is 14 per cent. However by notification dated 1 March, 2005, the effective rate of duty was reduced to 2 per cent. The relevant portion of the notification dated 1 March, 2005 is reproduced below :- "Effective rate of duty of goods of specified chapters In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods of the description specified in column (3) of the Table below and falling within the Chapter, heading, sub-heading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amended by the Central Excise Tariff (Amendment) Act, 2004 (5 of 2005), specified in the corresponding entry in column (2) of the said Table, - (a) from so much of the duty of excise specified thereon under the First Schedule to the Central Excise Tariff Act (hereinafter referred to as the First Schedule), as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here have been some misgivings among a section of the trade about the scope of this levy. To allay the apprehensions of the trade, some illustrations are given below to explain the scope of this levy : (i) A jeweller "ABC Jewellers" gets his articles of jewellery from goldsmiths/job workers who put a mark/sign/initials, etc. on the article of jewellery. This is only to identify that the article of jewellery was received from a particular goldsmith, etc. This is not branded jewellery and will not attract the tax. (ii) "ABC Jewellers", when it sells articles of jewellery to customers, puts a distinctive sign/mark/initials etc. on the jewellery. This is again for the purpose of identification so that when the jewellery is returned to ABC Jewellers, they will recognize the jewellery as their own. ABC Jewellers does not sell the jewellery under a brand name. This again is not branded jewellery, and will not attract the tax. (iii) "ABC Jewellers" advertises and sells its products under the brand "Star". It also puts the same brand name or an abbreviation thereof or a mark which has a connection with such brand name on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, and jewellery has also reportedly been seized. 3. Board has taken a serious view of the matter. It is surprising that Commissioners are not following instructions issued by the Board. To ensure that there is no further repetition of such incidents, and to avoid harassment of the jewellery industry, it has been decided that when a Commissioner is in doubt and is not in a position to decide whether a particular jewellery is branded jewellery or not, or when a jeweller contests that the jewellery sold by him is not branded jewellery, the matter should be referred to the Board. Such references should be sent through the Zonal Chief Commissioner giving full details and relevant documents indicating why the particular jewellery should be treated as branded jewellery. The Chief Commissioner should forward all such references to the Board by addressing it to Member (Central Excise) along with his comments in the matter. Till such time as the matter is decided by the Board, no precipitate action should be taken to charge excise duty on such jewellery. Obviously, no reference needs to be made to the Board where the jewellers themselves agree that they are manufacturing branded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Limited, are manufacturers or not. In this case the notice is supplying gold and other required materials to their job workers. The job workers manufacture articles of jewellery out of the materials supplied by the noticee and return to them and the same sold by the noticee from their premises. In the instant case, the noticee is getting the articles of jewellery manufactured on his behalf from the job workers out of the materials supplied by him. The job workers had not exercised any option to take registration and pay duty. Hence the responsibility to take Central Excise Registration, follow the procedure and pay Central Excise Duty lies with the Noticee, in terms of Rule 12AA ibid, introduced by the Government under Section 37 of the Central Excise Act, 1944. Further section 37 of the Central Excise Act, 1944, is an independent section of the Act, empowering the Central Government to make rules among other things for assessment and collection of Central Excise Duties, manner in which duties shall be payable [37(ib)] and specify the person who is required to be registered under section 6 of the Act. [37(xxvii)]. Exercising the powers vested under Section 37 of the Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or embossed on the articles of jewellery itself. 'Brand name or trade name' has been defined in the Explanation to mean, 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 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 identity of that person. 15. The Circular dated 4 March, 2005 issued by C.B.E. & C., after referring to the speech of the Finance Minister that excise duty of 2% would be levied on branded jewellery only, clarified that for attracting excise duty, the article of jewellery must be marketed and sold under a brand name. Three illustrations have also been given in the said Circular dated 4 March, 2005. The first illustration is of a case where a jeweller "ABC Jewellers" gets his articles of jewellery from job workers who put a mark/sign/initials on the article of jewellery. This is only to identify that the article of jewellery was received from a particular goldsmith and, therefore, would not be a branded jewellery. The second illustration is of "ABC Jewellers", whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id discussion, that the two decisions of the Tribunal; one rendered by the Principal Bench at Delhi in Anopchand Trilokchand and the other rendered by the Regional Bench at Chennai in Titan Industries, have to be examined. 19. The Tribunal in Anopchand Trilokchand observed that inscription of two small letters "AT" on jewellery items cannot make the said letters "AT" a brand name unless these two letters "AT" are covered by the definition of brand name or trade name. The Tribunal noticed that the respondent had a different trade mark/brand name registered in its name which had not been used on the articles of jewellery and, therefore, letters "AT" could not be called brand name of the respondent. 20. In Titan Industries the Tribunal noticed that the appellant was engaged in manufacture and sale of jewellery with brand name "TANISHQ" and when excise duty was levied on branded jewellery from 1 March, 2005, it paid excise duty on jewellery bearing brand name "TANISHQ". The appellant had also another brand name "GoldPlus". Subsequently, the appellant replaced the brand names "TANISHQ" and "GoldPlus" with marking "Q" and "I". It is for this reason that the Tribunal did not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of silver articles, since the brand name appeared in the packing material, 1% excise duty would be payable. The relevant portion of the decision of the Tribunal is reproduced below : "11. In the instant case, the appellant has a brand name 'Sanchi' and 'MMTC logo' as a house mark. In the case of medallion made out of gold or silver, it is the claim of the appellant that only the house mark is embossed on such items. In respect of other silver articles, such as cups, etc. whereas the house mark is embossed on such items, the brand name appears in the packing box in which such silver articles are sold. Notification No. 1/2011, dated 1-3-2011 imposed the excise duty at the rate of 1% not only on articles of jewellery, but also other articles made of precious materials such as, gold, silver, platinum, etc. Such duty was payable only in the cases where such goods were sold with the brand name. In respect of jewellery items, it is further specified in the notification (S. No. 88 as well as 89) that if such jewellery or 'other articles' bears the house mark, same shall not be considered as brand name in the facts of the present case. 12. The case in dispute is that medallio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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