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TMI Blog2012 (10) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... essional rate of duty. The appellant during 2004-2005 period, while paying duty at concessional rate of 9.6% adv. in respect of first clearance of rupees one crore of the goods bearing their own brand name, paid duty at normal rate i.e. 16% adv. in respect of clearance of the transmitter - receivers affixed with the brand name 'Maruti' cleared to MUL. The Department was of the view that affixing the name - 'Maruti' of MUL on the transmitter - receivers cleared to the OEM i.e. MUL does not mean that the goods are branded goods for the purpose of exemption Notification No. 9/2003-C.E. as the transmitter - receivers are used by MUL as capital goods by attaching the same to the machinery used in their production line, that in respect of these goods duty at concessional rate should have been paid in respect of the clearances made before crossing the threshold limit of rupees one crore and their value should have been included while calculating the value of clearances eligible for concessional rate of duty, and if this is done, the appellant would reach the threshold limit of exemption much earlier. On this basis, it has been alleged that notwithstanding the payment of duty by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3 (S.C.) has held that the goods affixed with the brand name/trade name of another person are not eligible for SSI exemption, even if those goods are not sold in the market as such but are used as inputs in the manufacture of other goods, that even if the Department's contention is accepted, there would not be any short payment and on the contrary there would be excess payment of duty, that in any case, the duty demand is time barred, as there is no suppression of facts for the reason that on the basis of the ER-1 returns filed by them, the Jurisdictional Superintendent, Central Excise, in January 2007 had raised this very issue and the appellant had clarified the position vide their letter dated 15-7-2007, that neither any duty is recoverable from the appellant nor any penalty is imposable on these and that the impugned order is, therefore, not correct. 4. Shri S.K. Panda, the learned Jt. CDR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) in the impugned order and emphasised that - (a) the transmitter - receiver affixed with the brand name 'Maruti' and which were used by MUL as part accessory of machinery, cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person" 4.3 In this case, there is no dispute that the transmitter - receivers affixed with the brand name - 'Maruti' were not used by MUL as component or accessory of cars manufactured by them but were used as parts/accessory of the production machinery. There is also no dispute that the appellant have not followed the procedure prescribed under Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 and are not covered by the exception to the provisions of para 4 of the notification, as mentioned in clause (a). The point of dispute is as to whether the goods, in question, are eligible for SSI exemption, as claimed by the department, or as claimed by the appellant are hit by para 4 of the notification and liable to duty at normal rate. 5. In the case of M/s. Kohinoor Elastics Pvt. Ltd. v. CCE, Indore (supra) the appellant were manufacturing elastics affixed with the brand name of their customer and the customers were using these elastics in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption is not lost if the "goods (elastic)" are manufactured as per orders of a customer and for use only by that customer. Explanation IX nowhere detracts from this position. It is correct that the words "that is to say" qualify the words "Brand name" or "Trade name". However the words "used in relation to such specified goods for the purpose of indicating or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark" cannot be read de hors Clause 4. They have to be read in the context of Clause 4. The words "used" indicates use by the manufacturer. It is the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It must be mentioned that reliance was sought to be placed on the meaning of the terms "brand name" and "trade name" as well as the words "indicating a connection in the course of trade" in the context of Trade Marks. In our view, the Notification has to be interpreted in the context in which the words are used in the Notification. Context in which such words are used under the Trade Marks Act or under principle governing trade marks have no relevance for purposes of interpreting such a Notification." 6. We are of the view that the ratio of the above judgment of the Apex Court is applicable to the facts of this case and Commissioner (Appeals) has gone wrong in holding that this judgment is not applicable to the facts of this case, as - (a) for denial of SSI exemption in terms of para 4 of the notification, what is relevant is that except for the exception mentioned in Clause (a) and (b) (which are not applicable to this case), the goods are affixed with the brand name of another person; and (b) the intention of the customer whose brand name is affixed on the goods is not relevant for the purpose of this notification and so long as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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