1. This appeal is against the order of the Additional Collector of Central Excise, Belgaum. Under the impugned order, the benefit of exemption Notification 175/86 has been denied to the appellants for the reason that they had invoiced the goods as 'Sintex' brand which is the brand name of another person. The appellants have also been penalised and their goods have been confiscated with option to redeem the same on payment of fine.
2. The learned Counsel for the appellants at the outset pleaded that the appellants were not affixing any brand name on the goods manufactured by them, The goods manufactured by them no doubt was out of the raw .materials purchased from M/s. Sintex Plast containers to whom the brand name belonged. He pleaded that before the learned lower authority they had pleaded that no brand name as such was affixed nor was there any brand name indicated on the frames manufactured by them out of the raw materials purchased by them from M/s. Sintex Plast containers. In this connection he drew our attention to the findings of the learned lower authority which are reproduced below for convenience of reference.
Even though the party has not affixed the brand name of sintex to the plastic doors etc. manufactured by them the fact remains that the same were cleared as sintex only as could be evidenced from their own admission their invoices and the statement given by their customers. By using a brand name of reputed manufacturers like Sintex in this manner, the party having no recognisable identity in the high competative market will definitely have an advantage in boosting the sales of their product and push the same in the market.
3. He pleaded that the objection of the lower authority is that once the appellants have sold out their goods as 'Sintex' brand goods to their customers they will be deemed to be falling within the mischief of para 7 of Notification No. 175/86, dated 1-3-1986.This para is reproduced below for convenience of reference.
"7. 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, the State Khadi and Village Industries Board, the National Small Industries Corporation or the State Small Industries Development Corporation.
Explanation [. - For the purposes of this notification, the expression 'value' means either the value as determined in accordance with the provisions of Section 4 of the Central Excises and Salt Act, 1944 (I of 1944) or, as the case may be, according to the tariff values fixed or altered under Section 3 of the said Act Explanation II. - For the purposes of computing the aggregate value of clearances under this notification, the clearances of any excisable goods, which are chargeable to nil rate of duty or which are exempted from the whole of the duty of excise leviable thereon by any other notification (not being a notification where exemption from the whole of the duty of excise leviable thereon is granted based upon the value or quantity of clearances made in a financial year) issued under Sub-rule (1) of rule 8 of the said Rules, or under Sub-section (1) to section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), shall not be taken into account.
Explanation III. - Where any specified goods (hereinafter referred to as inputs) are used for further manufacture of specified goods within the factory of production of inputs, the clearances of such inputs for such use shall not be taken into account for the purpose of calculating the aggregate value of clearances under this notification.
Explanation IV. - For the purposes of this notification where the specified goods manufactured by a manufacturer, are affixed with a brand name or trade name (registered or not) of another manufacturer or trader, such specified goods shall not, merely by reason of that fact, be deemed to have been manufactured by such other manufacturer or trader.
Explanation V. - For the purposes of this notification, where the specified goods are manufactured in a factory, belonging to or maintained by the Central Government or by a State Government or by a State Industries Corporation, or by a State Small Industries Corporation, or by the Khadi and Village Industries Commission, then the value of excisable goods cleared from such factory a lone shall be taken into account.
Explanation VI. - For the purposes of determining the value of clearances under this notification, in respect of Chinaware or Porcelainware or both, where a manufacturer gets such Chinaware or Porcelainware or both fired in a kiln belonging to or maintained by a Pottery Development Centre run by the Central Government or a State Government or by the Khadi and Village Industries Commission, the value of the x x x" He pleaded that unless the brand name is actually affixed shown to be affixed on the goods fabricated by them, the appellants will not come within the mischief of para 7 of the Notification in question.
4. The learned DR for the department pleaded that appellants' goods were not different from the sintex branded goods and therefore, the provisions of para 7 of the notification will get attracted.
5. We have considered the submissions made before us. The lower authority has given a clear finding that the appellants goods were not affixed with the brand name of Sintex. He has held that the appellants on their own have held out the goods to be of sintex brand and hence the appellants are not eligible for the benefit of Notification 175/86.
We are afraid, the interpretation' of the lower authority on the scope of para 7 of the Notification cannot be accepted. Para 7 clearly envisages affixation of brand name on the goods. It does not cover the goods which are merely invoiced under the brand name of other person.
Para 7 will come into operation only when goods actually bear the brand name. In the present case the goods have not been affixed with the brand name of any person. In view of above, we hold that the appellants will not be hit by the provisions of para 7 of the Notification. The appeal therefore has to be allowed with consequential relief. Ordered accordingly.