TMI Blog2018 (2) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the present cases. Appeal allowed - decided in favor of appellant - CIVIL APPEAL NO.8703 of 2015, CIVIL APPEAL NOS.8725-8726 of 2015, CIVIL APPEAL NO.8769 of 2015, CIVIL APPEAL NO.8565 of 2015, CIVIL APPEAL NO.9153 of 2015, CIVIL APPEAL NOS.8894-8895 of 2015, CIVIL APPEAL NOS.8896-8897 of 2015 - - - Dated:- 13-2-2018 - Mr. R. F. Nariman And Mr. Navin Sinha JJ. CIVIL APPEAL NO.13331 of 2015, CIVIL APPEAL NOS.9242-9243 of 2015, CIVIL APPEAL NO.9087 of 2015, CIVIL APPEAL NO.9249 of 2015, CIVIL APPEAL NO.9144 of 2015, CIVIL APPEAL NOS.8885-8886 of 2015, CIVIL APPEAL NOS.8890-8891 of 2015, CIVIL APPEAL NO.13330 of 2015, CIVIL APPEAL NO.8706 of 2015, CIVIL APPEAL NO.8743 of 2015, CIVIL APPEAL NOS.9146-9147 of 2015 And CIVIL APPEAL NOS.8759-8760 of 2015 For the Appellant(s) : Mr. S.K. Bagaria, Sr. Adv., Mr. Niraj Kishan Kaul, Sr. Adv., Mr. Amit Agarwalla, Adv., Mr. Saurav Agarwal, Adv., Mr. Saurabh Bagaria, Adv., Mr. Kapil Rustagi, Adv., Mr. Ajit Singh, Adv., Mr. Sanyat Lodha, Adv., Mr. Vivek B., Adv., Ms. Aakriti Dawar, Adv., Mr. Sushal Tewari, Adv. And Mr. T. R. B. Sivakumar, AOR For the Respondent(s) : Mr. K. Radhakrishnan, Sr. Adv., Mr. Rupesh Kumar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken us through the record, including the Commissioner s order dated 7.3.2014 and the impugned judgment of the CESTAT. According to learned counsel, the exemption that was granted qua jute bags under the Central Excise Act, 1944 was lifted for a period of two years, from 1.3.2011 till 1.3.2013, only if goods which were manufactured bore a brand name or were sold under a brand name. If the definition of brand name is to be seen, according to learned counsel, it will be clear that a brand name is a name or a mark 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. According to learned counsel, using the name of the buyer/procurer of food grains is obviously not a brand name that results in indicating a connection in the course of trade between the jute bag and the said buyer. They argued that the show cause notices proceeded on the footing that using the name of the manufacturer and an emblem of the manufacturer resulted in the use of a brand name, but that the CESTAT, realizing that this could not be so, founded its judgment on the basis of using the name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be a mark , leading to the fact that there is a brand name in these cases. According to him, a literal interpretation of the definition of brand name would show that the CESTAT is correct. Also, according to learned counsel, the CESTAT correctly relied upon the judgment in Kohinoor Elastics (supra) to arrive at a conclusion, based on the same definition of brand name, that there is a name or mark used, in the facts of these cases, and which shows not only the manufacturer s name, but the buyer s name or procurer s name as well. 6. Before dealing with the facts of these cases in some detail, it is important to first set out the exemption provided under Notification 30/2004 dated 9.7.2004. This notification, issued under Section 5A of the Central Excise Act, exempts excisable goods mentioned thereunder in public interest. Item 16 of the aforesaid notification exempts all goods falling within Central Excise Tariff Entry 63, except goods falling within 6307.10. The Central Excise Tariff, with which we are concerned, is 6305, and in particular, 63051030 and 63051040, where the rate of duty is 10%. Thus, upto 1.3.2011, it is clear that all the goods mentioned in Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Do- 6. BIS mark with licence No. As per BIS rule 3. The jute mills have to print the items on the bags as per the requirements of the buyers and the Notification No. S.O. 698(E) dated 04.07.2002 issued by the Jute Commissioner. 4. Reasons for printing the bags are given below: Item no. 1 2. The Notification No. S.O. 698(E) dated 04.07.2002 (copy enclosed) issued by the Jute Commissioner is to distinguish between Indian jute products and imported jute products and secure compliance of the stipulation of the order issued under JPM Act, 1987. These orders, inter alia, stipulate that percentage of total production of certain commodities or class or commodities required to be packed in jute packaging material manufactured in India from raw jute produced in India. A copy of the latest order dated 27.08.2010 and JPM Act, 1987 are enclosed. Item No.3 to 6. These are printed on bags so that buyers can identify their products and the year when food grains or other material is packed. If a buyer prefers jute products as per BIS standard, jute mill has to manufacture bags conforming to BIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e name or logo of the school, security agency, hotels, airlines and company, such goods would not attract the excise duty. It is also gathered that in some cases, apart from the name or logo of such organizations, the name of the tailor or manufacturer is affixed on such garments. However, mere affixing of name of the tailor or manufacturer would not constitute a brand name. Another related issue is the applicability of the mandatory excise duty to blankets which are supplied to the defence establishment, armed forces, police forces etc. against tenders that stipulate that the name of the manufacturer should be clearly indicated or marked on the product. As pointed out above, affixing the name of the manufacturer on such goods would not, by itself, bring them within the ambit of branded goods. 12.A reading of the aforesaid letter and circular would show that merely because the name of an institution is printed or embroidered on articles would not mean that they would become branded products. A brand name, in addition to the name or logo, would have to be given in order to attract excise duty. Also, mere affixing of the name of a manufacturer would not constitute a brand name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of copy of notification no. nil dated 04.07.02 issued by the Jute Commissioner and further clarification given by the said authority vide his letter dated 18.03.11, I find that some of the printings/writings contained in the body of jute bags as per requirement of the said Textile Ministry s Notification, as opined by the Jute Commissioner, and such goods cannot be treated as branded goods as viewed by him. In this context, I find that persuasive value of the Jute Commissioner s views in the matter may not be ruled out or brushed aside at one stroke, but as a quasi-judicial revenue authority, I am to go by the settled principles of law that nothing can be imported in the wordings of the statutory provisions, and for that matter, Chapter Notes require to be read in its stricter terms. Since the ingredients of the definition of brand name are present in the impugned jute bags, I am inclined to hold that such goods bear brand name to consider them as branded goods, for the purpose of levy of Central Excise duty for the rest period i.e. March, 2011 to February, 2013 is also sustainable. 16. The CESTAT, by the impugned order, set aside the penalty that was imposed and stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the identity of a person itself. It has to be something else which is appended to the product and which established the link. xxx xxx xxx 16. We would also like to reproduce the following observation from CCE v. Bhalla Enterprises [ CCE v. Bhalla Enterprises , (2005) 8 SCC 308] : (SCC p. 311, para 6) 6 . The apprehension of the assessees that they may be denied the exemption merely because some other traders even in a remote area of the country had used the trade mark earlier is unfounded. The notification clearly indicates that the assessee will be debarred only if it uses on the goods in respect of which exemption is sought, the same/similar brand name with the intention of indicating a connection with the assessees' goods and such other person or uses the name in such a manner that it would indicate such connection. Therefore, if the assessee is able to satisfy the assessing authorities that there was no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, it would be entitled to the benefit of exemption. An assessee would also be entitled to the benefit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onitoring and control by Governmental agencies involved in the PDS. Neither do such markings enhance the value of the jute bags in any manner nor is it the intention of the appellants to so enhance the value of jute bags, which is necessary if excise duty is to be imposed. This flows from the expression 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 . In the present case, the markings on the jute bags are not for the purpose of indicating a connection in the course of trade between the jute bag and some person using such name or mark. The markings are by compulsion of law only in order that Governmental authorities involved in the PDS may identify and segregate the aforesaid jute bags. This being the case, it is obvious that there is no brand name involved in the facts of the present cases. 19. Equally, it is clear that circulars that are issued by the Ministry of Finance are binding on the department of Central Excise, there being no judgment by this Court laying down the law contrary to such circulars. This is a well settled proposition as laid down in paragraph 30 of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son other than the person using that brand/trade name. As set out hereinabove once a brand/trade name is used in the course of trade of the manufacturer, who is indicating a connection between the goods manufactured by him and the person using the brand/trade name, the exemption is lost. In any case it cannot be forgotten that the customer wants his brand/trade name affixed on the product not for his own knowledge or interest. The elastic supplied by the appellants is becoming part and parcel of the undergarment. The customer is getting the brand/trade name affixed because he wants the ultimate customer to know that there is a connection between the product and him. (at page 532-533) 22. The facts of these cases are far from the facts in Kohinoor Elastics (supra). In Kohinoor Elastics (supra), it was found that, as a matter of fact, the customer wanted the brand name affixed on the product because he wanted the consumer to know that there is a connection between the product and him. This is very far from the facts of the present case, in that, as has been held by us above, it is clear that the markings required on the jute bags are compulsory, being required by the Jute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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