1992 (11) TMI 171 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Notification 175/86.
2. Interpretation of the exclusion clause in para 7 of Notification 175/86.
3. Application of the Mischief Rule in statutory interpretation.

Summary:

1. Eligibility for Concessional Rate of Duty:
The appellants, a registered small-scale industry, manufactured motor vehicle parts under Heading 8708.00 of CETA 1985 and sought the benefit of a concessional rate of duty under Notification 175/86 as amended by Notification 223/87. The benefit was denied because the goods were affixed with the brand name "FITWELL," which belonged to a trader not eligible for the exemption.

2. Interpretation of the Exclusion Clause in Para 7:
The adjudicating authority and the lower appellate authority held that the goods embossed with the brand name "FITWELL" at the forging stage were ineligible for the exemption. The appellants argued that they did not affix the brand name themselves, and thus, the exclusion clause in para 7 should not apply to them. The Tribunal found that the exclusion clause applies only to manufacturers who actually affix the brand name/trade name on the specified goods, not to goods already affixed with a brand name before reaching the appellants' unit.

3. Application of the Mischief Rule:
The lower appellate authority applied the Mischief Rule to deny the benefit, arguing that para 7 was introduced to prevent abuse of the exemption by large and medium-scale manufacturers. However, the Tribunal held that the plain meaning of the language in fiscal statutes should be adhered to, and there was no room for intendment. The Tribunal cited several Supreme Court decisions emphasizing that the plain and clear meaning of the words in a statute should be followed unless there is ambiguity.

Conclusion:
The Tribunal concluded that the appellants were entitled to the benefit of Notification 175/86 as they did not affix the brand name themselves. The appeal was allowed with consequential relief. The Tribunal emphasized that the exclusion clause in para 7 should be interpreted narrowly to apply only to manufacturers who affix the brand name on the specified goods.