Full Judgment
2. Appeal Nos. E/1550/91-B1 with suppl. E/H80/94-B1, E/1551/91-B1 and E/1481/94-B1 have been filed by the Department against a common order of Central Excise, New Delhi, dated 20-11-1990. Appeal No. E/1700/91-B1 has been filed by M/s. Allied Industries against the impugned order of Addl. Collector of Central Excise, New Delhi, dated 18-1-1991.
3. Since the above appeals involve identical issue relating to scope and interpretation of 175/86, dated 1-3-1986 particularly with reference to use of alleged brand name in terms of Para 7 which is as under :- "The exemption contained in this notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification : 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.
Provided further that nothing contained in this paragraph shall be applicable to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of the Khadi and Village Industries Commission or of the State Khadi and Village Industries Board." All the appeals are consolidated and taken up together and disposed of by common order.
4. For the purpose of convenience, we take up Appeal No. E/1700/91-B1 relating to appellant Allied Industries v. CCE, New Delhi.
5. Shri Nambirajan, Ld. Counsel for the appellant submitted that the short issue arising out for determination in the appeal is with reference to the appellant's eligibility to the benefit of Notification No. 175/86, dated 1-3-1986 as amended. It was submitted that the appellant is manufacturing of his own End Caps and supplying the same to the customers M/s. Anfilco Ltd. who in turn manufacture filters for automobiles with brand name MICO and supply the same to the Company MICO. It was suspected that so far as the appellant is concerned, the appellant is supplying End caps only to their customers Anfilco by putting the name of MICO on top purely for the purpose of MICO. The appellants are not trading in these goods namely End caps in the market even after manufacturing them for Anfilco, who is using the same End caps and supplying the whole products in their own name to M/s. MICO.Appellants' customers namely Anfilco is not separately marketing End caps as such even as spare parts. M/s. Anfilco Ltd. are using these in manufacture of filters for automobiles and then supply to M/s. MICO. It was alleged that the end caps in question are neither purchased nor sold in the market in the commercial sense and are meant only for the exclusive use in the filter as it is essential as inner component part.
Ld Counsel further urged that it has absolutely no trade connection whatever between appellant on the one hand and MICO on other hand vis-a-vis and in the entire question therefore the notification in question particularly called reference to the restriction scope on its benefit on grounds of brand name, it is construed and understood in the context of manufacture of end caps by the appellants and supply thereof solely to the customers M/s. Anfilco Ltd. 6. Ld. Counsel submitted that the identical issue came up for consideration in adjudicating proceedings and as against the decision taken by the original adjudicating authorities against the assessee, the appellants assessee preferred an appeal before the CEGAT, New Delhi who by a common order decided the issue in favour of the assessee. As against which the Department preferred an appeal which stands as Nos.
E/1550/91, E/1480/94, E/1551/91 and E/1481/94-B1. Shri Sridharan, Ld.
Counsel urged advancing reasonings in the order of Central Excise (Appeals) referred to supra has to be accepted and relief given to the appellants. Ld. Counsel further urged that subsequent to the impugned orders, the Board was called upon to give clarification on this identical issue and the CBEC has clarified the same vide Circular No.171/94-CE, dated 27-10-1994 which is reported in 1994 (74) E.L.T. at page T23. Ld. Counsel submitted that the Board has clearly clarified that when the goods manufactured by Small Industrial Unit affixed with a brand name or in trade in the market or purchases in the market and are sold only to customers for further manufacture, such manufacturing activity would not come within the meaning of concept of brand name under Clause 7 to 177/86 for denying the benefit of the same to the assessee or manufacturer. Ld. Counsel further urged that this clarification of the Board was not before the Ld. Addl. Collector when the impugned order was passed. Finally Ld. Counsel submitted that now a clarification has been authentically issued by the CBEC which is binding on the subordinate authorities. This Bench take note of the same and on application of the clarification of the higher authorities, grant relief by allowing their appeals and disposing the file of Revenue.
7. Shri Arora, Ld. DR submitted that in as much as clarification attached on the issue in question has been rendered by the Board only on 27-10-1994, it will be proper that the matter should be remanded to the original authorities for consideration of issue afresh in view of the clarification by the Board. Ld. DR also further submitted that the Bench of this Tribunal in the Three-Member Bench in the case of Agrico Engg. Works v. CCE, Meerut 1994 (72) E.L.T. 689 has also dealt with the scope of brand name which are Notification 194/86 and directions may be issued to the original authority to take into account the applicability or otherwise of the ratio of this ruling as well while disposing of the matter. Shri Sridharan in reply to the submissions of Ld. DR with reference to the applicability of ratio of this ruling of this Bench in Agrico Engg. Works (supra) contended that in fact contentions are clearly distinguishable from the facts of present case and in case of Agrico Engg. Works there was clear evidence that small scale manufacturer had affixed the brand name in the part which he had manufactured and sold to Escorts.
8. We have considered the submissions before us. On going through entire records and hearing submissions of the party, we find that the clarification issued by the Board referred to above would be relevant for consideration of issue in question. For the purpose of convenience the circular issued by the Board [reported in 1994 (74) E.L.T. - T22-23] is given below :- 9. Since the above clarification has bearing on the issue to be decided and will have overall implication on the assessee manufacturer, we are inclined that the matter should go to the original authority as Revenue's contended by Ld. DR. In view of the matter we set aside the impugned order appealed against and all the appeals are remitted to the Central Excise, New Delhi for reconsideration of the issue by Deputy Collector in the light of our observations above and also in the light of clarification of the Board cited above. This is open to the parties to put forward all the pleas and rely upon any order-in-law. The appeals stand remanded to the Collector/Deputy Collector of Central Excise, New Delhi. We note that in order to avoid possible conflict of view, the same adjudicating authority should decide all the five appeals.