TMI Blog2015 (10) TMI 1569X X X X Extracts X X X X X X X X Extracts X X X X ..... er's name on the HDPE sacks/bags, would not come within the mischief of para 7 of the Notification No. 175/86-CE, accordingly, the benefit of SSI exemption Notification No.175/86 dated 1.3.1986 could not be denied to them. The reasoning and observation of the Larger Bench of the Tribunal in this case was specifically overruled by the Hon'ble Supreme Court in Kohinoor Elastics Pvt. Ltd.'s case [2005 (8) TMI 115 - SUPREME COURT OF INDIA]. On affixing the brand name/trade name of another person, an assessee would be ineligible to avail the benefit of the exemption notification. It flows from the said observation that it is not necessary to examine the reason/cause for affixing the brand-name of another person. It is also clearly laid down that trade does not indicate a trade in its general sense that the goods be brought to the market for sale, but the dealing/trade between the assesse-manufacturer and its customers would meet the requirement. Also, it has been clearly laid 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 sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Infrastructure Pvt. Ltd. is visited for the purpose of determination of the issues involved. The Appellant, M/s. Hooghly Infrastructure Pvt. Ltd. are engaged in the manufacture of various jute products, including He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GS 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 manufactured are used for packing food grains which are later sold/distributed through public distribution system (PDS) and other welfare schemes for the weaker sections of the society. Thus, there is no pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ian 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 submission made by the appellant in the present case. The observation made therein was in the context of eligibility of the benefit of SSI exemption which was sought to be availed in an oblique manner on ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 procurement agency of the Government involved in its distribution are not a brand name in relation to the bags classified under chapter 63. Thus, there is no nexus between name of the procur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvanced 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. Tracing the history of the exemption Notification, the ld.spl. counsel has submitted that the principal Notification i.e. Notification No.30/04-CE dated 09.07.2004 was issued way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 availed on the manufacture of specified goods despite the use of brand name of the afore-mentioned organization. It is his submission that brand names of aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int 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 ₹ 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 from the customers, therefore, there is no room for any interpretation as to ascertain whether these jute bags are branded or otherwise. It is his submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escription 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other process required for spinning, by a manufacturer who does not have the facilities in his factory (including plant and equipment) for producing goods of heading Nos. 55.01, 55.02, 55.03 and 55.04. 11. 56 (except 5601.10, 5607.10, 5608.11) All goods 12. 5702.19, 5703.90 All goods 13. 58 (except 5804.90, 5805.90, 58.07, 5808.10) All goods 14. 59 (except 5907.30) All goods 15. 60 All goods 16. 61, 62, 63 (except 6307.10) All goods [Notification 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 sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch any process is ordinarily carried on with the aid of machines; and (iii) Other carpets and other textile floor coverings of coconut fibres (coir) or jute, whether or not made up. Explanation. - For the purpose of chapter 57 the term machines'' shall not include manually operated implements, used independently by hand, such as hooking guns, tufting guns and knitted guns. (ii) in the TABLE, for S.No. 14 and the entries relating thereto, the following S.No. and entries shall be substituted, namely:- (1) (2) (3) 14. 59 (except 5906 10 00) All goods. (iii) 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 6305, 6309 00 00 and 6310) All goods other than those bearing a brand name or sold under a brand name. [Notification No. 30/2011-C.E., dated 24-3-2011] 22. The nerve chord of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of the said exemption Notification, it is necessary to refer the principles governing the interpretation of an exemption notification. In a recent case, B.P.L Ltd. Vs. Commr. C.Ex., Cochin-II 2015 (315) ELT 556(SC), their Lordships of the Hon'ble Supreme Court referring to the earlier decisions on the subject observed as: 18. We approve the aforesaid reasoning and rational given by the Tribunal in coming to the conclusion that the goods of the appellant would not qualify the description contained in Notification Nos.8/96 and 4/97. It is trite that strict interpretation is to be given to the exemption notifications and it is upon the assessee to approve that he fulfills all the conditions of eligibility under such Notifications. This is so held by this Court in Rajasthan Spinning and Weaving Mills, Bhilwara, Rajasthan v. Collector of Central Excise, Jaipur, Rajasthan - (1995) 4 SCC 473 , 1995 (77) E.L.T. 474 (S.C.), wherein this principle was stated in the following manner: 16. Lastly, it is for the assessee to establish that the goods manufactured by him come within the ambit of the exemption notification. Since it is a case of exemption from duty, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification, i.e., by the plain terms of the exemption. 26. It is the contention of the Revenue that the wordings of the exemption Notification are clear and unambiguous, inasmuch as, it stipulates that if the goods are bearing a brand name or sold under brand name then the same are not eligible to the benefit of the Notification, irrespective of the fact that whether the brand-name is affixed/printed voluntarily or under compulsion of law. 27. It is also argued on behalf of the Revenue that it is not the intention of the government to extend the exemption to the manufacturer's of Jute bags on affixing the logo and other particulars of user of the jute bags, who are state government/Central government undertakings like, Food Corporation of India(FCI) etc.. To buttress their aforesaid argument, the Revenue referred to and relied on the SSI exemption Notification No.08/2003-CE dated 01.3.2003, wherein, even though under the said notification, branded goods fall outside its scope, however, goods which are branded with the customer's name/logo, namely KVIC,SKIV,NSIC, SSIDC,SSIC etc., allowed to enjoy the benefit of the said Notification. Since such an exception is not pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this judgement also, we do not find any support in applying the principles laid down therein to the facts of the present case. 31. In Australian Foods (India) Pvt.Ltd.'s case (supra) the question of law arose for consideration was whether the appellant therein are eligible to SSI benefit under Notification No.01/93-CE dated 28.2.1993. The appellant therein were engaged in the manufacture and sale of cookies from branded retail outlet named as cookie man . The brand name was acquired from M/s. Cookie Man Pvt. Ltd., Australia. The appellant were selling some of the cookies in plastic pouches on which the brand name cookie man was printed and no brand name was affixed or inscribed on the cookies when it was sold in loose from the counter of the same retail outlet. The question was whether these cookies sold in loose form from the said retail out let would be eligible to the SSI exemption. Their Lordships after examining the issue in detail observed that the cookies sold from the branded outlet would not be eligible for exemption under the SSI exemption notification as there is no requirement that the cookies should bear the brand name. This case also, in our opinion, do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation came for interpretation before the Hon'ble Apex Court reads as follows:- 4. The exemption contained in this notification shall not apply to the specified goods, bearing a brand name or trade name (registered or not) of another person: Provided that nothing contained in this paragraph shall be applicable to the specified goods which are component parts of any machinery or equipment or appliances and cleared from a factory for use as original equipment in the manufacture of the said machinery or equipment or appliances and the procedure set out in Chapter X of the said Rules is followed: Explanation IX. - Brand name or trade name shall mean a brand name or trade name, whether registered or not, that is to say a name or a mark, [Code number, design number, drawing number, symbol, monogram, label,] signature or invented word or writing which is 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 with or without any indication of the identity of that person 35. After a detailed deliberation on various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exemption is lost if the goods bear the brand/trade name of another. There are no other qualifying words. The term goods admittedly refers to goods which are otherwise excisable except for the exemption granted by the Notification. In this case admittedly goods are the elastic manufactured by the Appellants. As stated above Clause 4 does not provide that exemption is lost only for goods (elastic) which are sold in the market or on those goods (elastic) which reach customers without any change in form. Clause 4 does not provide that the exemption will not be lost if the goods (elastic) are only used as inputs in the manufacture of other goods. Most importantly Clause 4 does not provide that exemption 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brand/trade name affixed because he wants the ultimate customer to know that there is a connection between the product and him. Of course the intention of the customer is not relevant for the purposes of this Notification. This is being mentioned only to indicate that interpretation sought to be placed by Mr. Sridharan would enable manufacturers, who are otherwise not eligible, to get manufactured from small scale industries like the Appellants their goods or some inputs, affix their brand/trade name and still avail of exemption. When the wording of the Notification are clear and unambiguous, they must be given effect to. By a strained reasoning benefit cannot be given when it is clearly not available. 36. A plain reading of the aforesaid observation of their Lordships makes it clear that on affixing the brand name/trade name of another person, an assessee would be ineligible to avail the benefit of the exemption notification. It flows from the said observation that it is not necessary to examine the reason/cause for affixing the brand-name of another person. It is also clearly laid down that trade does not indicate a trade in its general sense that the goods be brought to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in the contention of the Ld. Adv. Shri J.P.Khaitan that the Ld. Adjudicating authority has travelled beyond the scope of Show Cause Notice relating to Appeal Nos. E/70791/13, 70886/13, 71001/13, 75351/14 75525/14 in passing the impugned Order, hence it is bad in law. We find that the Show Cause Notices were issued proposing denial of the benefit of the exemption Notifications, which have been adjudicated by the Ld. Commissioner on the basis of a fair interpretation of the Notifications and the principles of law settled by the courts and Tribunal on the issue and concluded that the benefit of the exemption notification is not admissible. Hence, in our opinion, the Ld. Adjudicating authority has not travelled beyond the scope of the Notice. 41. We find that in the impugned order the ld. Commissioner has imposed penalty and in few cases confirmed demand, wherein extended period of limitation is invoked. We do not find merit in the said conclusion of the ld. adjudicating authority, inasmuch as, the present issue relates to interpretation of the concept of brand name referred to under the relevant Notification No.12/11-CE dated 01.03.2011 and 30/11-CE dated 24.3.2011 and the bra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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