Whether SSI exemption available partly for goods cleared without brand name?

PJ/Case Law/2014-15/2156

Case:- MAHAL FOUNDARY Vs COMMISSIONER OF CENTRAL EXCISE, JALANDHAR

Citation:- 2014 (300) E.L.T. 566 (Tri. - Del.)

Brief facts:- Demands stood raised against the appellant, who was engaged in the manufacture of C I shafts, water circulator pumps on the ground that they were using the brand name of another person and as such, were not entitled to the benefit of small scale exemption Notification Nos. 1/93 and 8/99.

Appellant’s contentions:- Learned advocate appearing for the appellant fairly agreed that the brand name belonged to the father of the proprietor of the appellant and as such, use of the same amounts to use of brand name belonging to another person. However, he submitted that the appellant, apart from manufacturing goods under the brand name of proprietor’s father, was also manufacturing goods where no brand name was being used by him. As such, he submitted that the goods manufactured by the appellant without any brand name were admittedly entitled to the benefit of exemption notification.
He further submitted that a specific plea was taken by the appellant before Commissioner (Appeals) and he also drew attention to a letter dated 4-1-2005 written by Superintendent wherein after giving reference to the appeal pending before the Commissioner (Appeals), the request made to the appellant to supply the sale invoice for the relevant period from 1-4-2002 to 31-3-2003 and a list indicating the clearance of branded goods/unbranded goods mentioned on the invoices. The said letter was replied to by the appellant on 5-1-2005 wherein they submitted that the sale invoice already stood resumed by the Central Excise (Preventive) department on 26-4-2002 and were still lying with the department. However, the list of clearance of branded as also unbranded goods were provided. It was also submitted that wherever they have used the brand name, the same stand mentioned on the invoice.

Respondent’s contentions:- Commissioner (Appeals), did not refer to the said letter of the appellant and their plea that the brand name was not being used on all the goods manufactured. By giving a reference to the statement of the proprietor of the appellant wherein he admitted the use of brand name, the appellate authority observed that the same must have been used in respect of all the goods manufactured by the assessee.

Reasoning of judgment:- It was not disputed that the invoices issued by the appellant show the brand name in some cases and do not reflect upon the use of brand name in some cases. If the appellant was using the brand name in respect of all the goods manufactured by them, they would have reflected the same in all the invoices and there was no reason for them to reflect the use of brand name in some of the invoices and to abstain from mentioning the same in other invoices. This fact clearly reflected upon the fact that brand name was only used wherever they were mentioned in the invoices. As such, the Tribunal agreed with the learned advocate that wherever invoices were showing the brand name, the benefit of small scale exemption notification was to be denied only in those cases. As the same requires factual verification and examination, which exercise could be done only at the original stage level, we set aside the impugned order and remand the matter to the original adjudicating authority for doing the said exercise and for re-quantifying the appellant’s duty liability.

Decision:- Appeal was allowed.

Comment:- The analogy drawn from the case is that if brand name is used by the assessee for part clearances and some of the clearances are made without using the brand name, then the benefit of SSI exemption is admissible for the part of the clearances that are made without using the brand name. However, it is required to be establish with evidences that the part of the clearances were made without using brand name and the onus lies upon the assessee.

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PJ/Case Law/2014-15/2156

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