TMI Blog2016 (2) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... "Brand name/Trade name of Chapter Note 12 and the Explanation to the Notification No.4/2005 dt.1.3.2005. Therefore by respectfully following the ratio of apex Court decision in the case of Grasim Industries and Australian Foods India Pvt. Ltd. [2013 (1) TMI 330 - SUPREME COURT] we have no hesitation to hold that jewellery manufactured and cleared by the appellants during the relevant period are branded jewelllery and chargeable to duty. Demand confirmed with reduced penalty - Decided against the assessee. - Application No. E/Misc./42075/2013 (by Dept.) and Appeal No. E/326/2012 - Final Order No. 40212/2016 - Dated:- 15-2-2016 - Hon ble Shri R. Periasami, Technical Member And Hon ble Shri P. K. Choudhary, Judicial Member For the Appellant : Shri Arvind P. Datar, Senior Advocate and Mrs. Radhika Chandrasekhar, Advocate For the Respondent : Shri K.P. Sridhara Raman, Special Counsel and Shri M. Rammohan Rao, JC (AR) ORDER Per R. Periasami The appellant filed appeal against the impugned order dated 27.2.2012 passed by Commissioner of Central Excise, Chennai III. 2. Revenue filed miscellaneous application for change of cause title as the appellant had opt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharged excise duty on the jewellery having the brand name and logo of TANISHQ which was a registered brand name. Subsequently, they decided not to emboss the brand name on the jewellery from 1.7.2006 which they duly intimated to the Department. Thereafter, they started clearing unbranded jewellery and also submitted that during the period without affixing the brand name they cleared by another brand name GoldPlus . He submits that once they decided not to affix their brand name they are not liable for excise duty. Whereas in the impugned order duty has been demanded on the ground that the letters Q and I embossed on the reverse of the jewellery have to be treated as brand name. He further submitted that the general practice in the jewellery trade that jewellery will have identification mark to indicate the name of the person who made the jewellery, name of the job worker. He submitted copies of photographs of jewellery where on the reverse of the jewellery, the letters AM is embossed and on the other side Q is embossed. He also produced photograph of the Branded jewellery which was cleared previously under the brand name TANISHQ and the logo was embossed on the branded jewell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that excise duty is leviable on branded jewellery only if the brand name or trade name is indelibly affixed or embossed on the article of jewellery itself as per Chapter 71 and such affixing or embossing of brand name or trade name on the jewellery would amount to manufacture. He submits that they have stopped affixing the brand name of TANISHQ . 8. The senior counsel then drew attention to the Board s Circular dated 4.3.2005 where the Board has categorically clarified at para 2(i) and 2(ii) where a jeweller, when it sells articles of jewellery to customers, puts a distinctive sign / mark / initials etc. on the jewellery, it is only to identify that the article of jewellery was received from a particular goldsmith. Board has clarified that it is not a branded jewellery and it will not attract tax. in the present case, he submits that AE and AM is an identification on the part of the job worker. He drew attention to para 2(ii) of circular where an example was given clearly explaining that when a jeweller sends an article of jewellery to a customer, puts a distinct sign/mark/initials etc on the jewellery. This is again for the purpose of identification so that if the jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or affixed on the jewellery which cannot be classified under branded jewellery as per Chapter Note to Chapter 71. He relied on the following decisions:- (a) BHEL Ancillary Association Vs. Collector of Central Exise - 1990 (49) ELT 33 (Mad.) (b) Commissioner Vs. ITC Ltd. - 2002 (142) ELT A79 (SC) 11. He also submitted that in trademark, a single letter of alphabet cannot be registered under Trademarks Act. He submitted that case law relied by the adjudicating Commissioner CCE Vs. Australian Foods (India) Ltd. 2013 (287) ELT 385 (SC) is distinguishable and not applicable to their case as the Hon ble Supreme Court in the above case held it has no relation to ruling on the brand name defined for the purpose of SSI Notification No. 1/93 whereas for the branded jewellery Explanation VIII is not borrowed as the Chapter Note XIII of Chapter 71 itself provides the definition of branded jewellery. He submits that all the Board s circular and the Chapter Note and the decisions were placed before the adjudicating Commissioner whereas in the impugned order the Commissioner failed to give any reasons or distinguished the same. 12. On limitation, the learned Senior Advocate su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout logo, instead they started affixing and marking on the jewellery with letter Q and I . They have replaced TANISHQ brand name with Q . The letter Q is automatically identified as jewellery of TANISHQ brand. Commissioner has rightly relied on CCE Vs. Grasim Industries case reported in 2005 (183) ELT 123 (SC). He further submits that Grasim Industries decision was relied only for the limited purpose of how the identify the brand name. He also submits that the inscription of Q is crucial as they decided to mark Q only after they decided withdraw affixing TANISHQ. It is also admitted by the appellant I is to identify GoldPlus brand jewellery and Q is related to identify TANISHQ brand which is a costly brand of jewellery compared I . He relied on the decision of the Tribunal in the case of CCE, Coimbaore Vs. Metriplex Pumps Ltd. 2011 (272) ELT 685 wherein this Tribunal has clearly held that use of single letter K on the pumps as well as on the cover of the pumps. He drew attention of the Tribunal s stay order wherein this Tribunal has discussed the use of letter Q which also refers to guarantee for its quality. He countered all the citations relied on by the learned Senior Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a brand name or trade name and chargeable to duty of excise as Branded jewellery or otherwise and (2) whether the demand is hit by limitation and the demand confirmed and penalty imposed on the appellants is sustainable or otherwise. Appellant M/s.Titan Industries Ltd. are registered with Central Excise for manufacture of branded jewellery. There is no dispute on the fact that appellant is engaged in the manufacture and sale of jewellery with their brand TANISHQ which is one of the largest jewellery brand. When excise duty was levied on branded jewellery from March 1.3.2005, the appellants had discharged excise duty on the branded jewellery bearing the brand name of 'TANISHQ'. Appellants also had another brand Goldplus which is meant for semi-urban and rural customers. 17. The period of dispute is from September 2005 to July 2009. The Adjudicating authority in his findings had discussed all the contentions of the appellants in detail and their submissions made before this Tribunal are one and the same. 18. On the preliminary issue raised by the appellant that the adjudicating authority not followed the directions of Board's circular dt. 29.12.2005 and dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name or mark with or without any indication of the identity of that person. 13. For the purposes of heading 7113, the processes of affixing or embossing trade name or brand name on articles of jewellery shall amount to manufacture . The relevant Sl.No.14 of the Notification No.4/2005 and the Explanation to the Notification is reproduced as under :- S.No. Chapter or heading or sub-heading or tariff item Description of goods Rate under the First Schedule Rate under the Second schedule (1) (2) (3) (4) (5) 14. 7113 Article of jewellery on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself. 2% - Explanation.- For the purposes of this 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation thereof or a mark which has a connection with such brand name either on the jewellery or article itself or on the packing such as the jewellery box or pouch or even on the warranty card or certificate of quality. Such goods will clearly be treated as branded and will be liable to duty. 2. It is learnt that based on the said clarification some enquiries have been initiated by the departmental agencies seeking to demand duty on such articles of jewellery which are packed in boxes, pouches etc. bearing a trade name or brand name or mark. References have since been received from the Trade requesting for providing clarity on levy of excise duty on jewellery sold under a Brand name. The industry has drawn attention to condition no. 8 of notification no. 5/2006-C.E., dated 1-3-06 which provides that the exemption shall not be applicable to articles of jewellery of heading no. 7113 on which brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself. It has been argued that accordingly only such jewellery where brand name or trade name is indelibly affixed or embossed on the articles of jewellery itself should attract excise duty and duty shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that for attracting this levy, the article of jewellery must be marketed and sold under a brand name. Despite this, there 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 gold smiths/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 jeweller , 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise, Hosur which is also reproduced in para-19 of the OIO wherein they have clearly admitted that the product will have a mark for the purpose of identifying that it is their product. 23. It is relevan to see that the definition of brand name or trade name defined under Chapter Note 12 to Chapter 71 and the Explanation to the Notification are wide and covers any name whether registered or not and includes a mark, symbol, letter which is used in relation to the product so as to indicate a connection in the course of trade between the product and the appellants. The appellant clearly admitted before the adjudicating authority that articles of jewellery which was earlier cleared under the brand name of Tanishq has now changed to letter Q and the logo GoldPlus is replaced by letter I and the product line is also maintained separately from the manufacture stage till the clearance and sale. The appellant's plea that letters Q and I are embossed only for the purpose of identification and not for the purpose of brand name is beyond acceptance as the appellants are one of the reputed branded jewellery manufactures in India manufactured and cleared branded jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, that the word comfit was owned by the Respondent. It was on that basis held that the Respondents therein were entitled to the benefit of Notification. To this extent the Tribunal was right. However, the Tribunal has unnecessarily also gone on to comment as follows : Mere indication of the foreign company s name does not create any association in the course of trade between the goods and the foreign company. There would be no purpose in indicating the foreign company s name in relation to the product except to indicate a connection between the product and the foreign company. Therefore, to this extent, the Tribunal is not correct. 18. In the case of Commissioner of Central Excise, Hyderabad v. Sarat Electronics reported in 2004 (167) E.L.T. 404 the question was whether the Respondents (therein) were entitled to benefit of Notification No. 1/93-C.E., which Notification was identical to the one under consideration by us. The Respondents therein used the words SARAT in bold letters following which the words A quality product from ITL group and Technical licencee of ITL were also printed. The Tribunal, following its earlier decisions, held as follows : 6. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of trade. The mark Q I embossed on the jewellery is clearly identifiable as products of M/s.Titan Industries Ltd. and the markings of Q I which are embossed in place of brand name of Tanishq and GoldPlus . If the appellant's intention was only for identification purpose and there was no need for them to emboss specific mark Q for jewellery to their Tanishq brand and use the letter I for the brand Goldplus . Therefore it is evident that the purpose of affixing of indelible embossing of Q and I marks on the jewellery manufactured and cleared by the appellant is to indicate the connection between the product and the appellant company. The use of Q I on the jewellery is to show the product is from Titan Industries and it established the intention to show the connection between the jewellery and M/s.Titan Industries. In addition to mark Q and I , the appellant also embossed the mark AEI and AE which are marks to indicate persons who manufactured the jewellery. Therefore, by respectfully following the apex Court decision, we have no hesitation to hold that mark Q I embossed on the jewellery manufactured and cleared by appellant is the brand/trade name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, which used branded elastics produced by P1, and retained the brand name of P1 in the final product. P2 was denied exemption under the same notification involved in the present case because of the appearance of brand name of another i.e. P1, not covered by the same notice. P2 argued that the presence of P1 s brand name should not be taken as a basis for disqualification from the benefits of the exemption since the customer buying the goods would continue to associate the goods with P2 and not P1, thus making it a branded goods of only P2. This Court rejected the contention and held that P1 is providing a stamped input for captive consumption to P2 because he wants the ultimate customer to know that there is a connection between the product and him . The Court further observed that the term specified goods is used without any caveats and hence rejected the contention that some consideration should be given to the fact that P1 was used only as an input in the making of the final product of P2. It is in this background that this Court observed that the requirement of the notifications must be adhered to strictly and cannot be diluted by substituting the term specified goods with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal has ignored Explanation IX. Explanation IX makes it clear that the 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. This makes it very clear that even a use of part of a brand name or trade name, so long as it indicates a connection in the course of trade would be sufficient to disentitle the person from getting exemption under the notification. In this case, admittedly, the brand name or trade name is the word ARR with the photograph of the founder of the group. Merely because the registered trade mark is not entirely reproduced does not take the respondents out of clause 4 and make them eligible to the benefit of the notification. 16. Similarly, in Commissioner of Central Excise, Chandigarh-I v. Mahaan Dairies - (2004) 11 SCC 798 = 2004 (166) E.L.T. 23 (S.C.), it was noted as follows : 6. We have today delivered a judgment in CCE v. Rukmani Pakkwell Traders, (2004) 11 SCC 801 wherein we have held in respect of another notification containing identical words that it makes no differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, all other goods, sold without any appearance of a brand or trade name on them, would not be deemed unbranded goods; to the contrary, they may be deemed to be branded goods of that outlet unless a different brand or trade name appears. 19. Hence, we hold that it is not necessary for goods to be stamped with a trade or brand name to be considered as branded goods under the SSI notification, discussed above. A scrutiny of the surrounding circumstances is not only permissible, but necessary to decipher the same; the most important of these factors being the specific outlet from which the goods is sold. However, such factors would carry different hues in different scenarios. There can be no single formula to determine if a goods is branded or not; such determination would vary from case to case. Also, our observations must be limited to this notification and not supplanted to other laws with similar subject matter pertaining to trade names and brand names. 20. Applying the said principles on the facts at hand, we fail to see how the same branded cookies, sold in containers, can transform to become unbranded ones, when sold from the same counter, or even from an adjoining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries and Australian Foods India Pvt. Ltd. (supra) we have no hesitation to hold that jewellery manufactured and cleared by the appellants during the relevant period are branded jewelllery and chargeable to duty. 26. As regards the limitation issue, it is clearly brought out in the findings of the adjudicating authority that appellants have cleared branded jewellery on payment of central excise duty and suddenly on their own decided not to affix registered brand name of Tanishq and GoldPlus and chosen a novel method to replace with embossing of marking of letters Q I representing both Tanishq and GoldPlus and claimed that they were clearing as unbranded jewellery. Further the demand is within the normal period. Therefore, question of limitation does not arise in this case. 27. As regards the imposition of penalty, we find that the adjudicating authority imposed penalty under Rule 25 of Central Excise Rules. Taking into overall circumstances of the case the penalty imposed is on the higher side and merits reduction in quantum of penalty. 28. In view of our forgoing discussions, we hold that mark Q I indelibly embossed on the jewellery manufactured and cleared by th ..... 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