M/S. Arr Enterprises Vs. Commissioner of Central Excise, Trichy - Court Judgment

SooperKanoon Citationsooperkanoon.com/941781
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Chennai
Decided OnAug-19-2010
Case NumberAppeal Nos. E/658 of 2005, E/869 of 2006 & E/351 of 2007
Judge THE HONOURABLE MS. JYOTI BALASUNDARAM, VICE PRESIDENT & THE HONOURABLE DR. CHITTARANJAN SATAPATHY, TECHNICAL MEMBER
AppellantM/S. Arr Enterprises
RespondentCommissioner of Central Excise, Trichy
Advocates:Shri K.S. Venkatagiri, Advocate, for the Appellants. Shri C. Dhanasekaran, SDR for the Respondent.
Excerpt:
1. heard both sides. 2. the issue relates to the eligibility of the appellants for small scale exemption. “unbranded chewing tobacco” is one of the specified goods covered under the small scale exemption notification. branded chewing tobacco on the other hand is not covered under the scheme. goods manufactured with the brand name of another person are also not eligible for small scale exemption. the labels used for chewing tobacco manufactured by the appellants have been examined. for the period 1.5.2003 to 31.3.2004, the appellants have used a different label. this period is covered by appeal no. e/658/2005. the other two appeals no. e/869/2006 and no. e/351/2007 relate to the subsequent period during which different labels have been used by the appellants. all these three appeals are taken up together. 3. in the first period, the appellants have used the abbreviation “arr” in very large letters on the label of their product whereas in the latter period they have indicated on the label “mfrs. arr enterprises” along with the address. after hearing both sides on the issue and perusal of the cited decisions, we find that the label used during the first period does demonstrate the use of the brand name “arr”, which is part of the brand name of arr seeval pvt. ltd. it has been argued by the learned counsel shri k.s. venkatagiri that the entire trademark has not been used inasmuch as the picture in the brand name / trademark does not find a place on the labels used by the appellants during the first period. however, we find that in the case of cce, trichy vs. rukmani packwell traders - 2004 (165) elt 481 (sc), the hon’ble supreme court has held that even use of a part of brand name or trade name, so long as it indicates a connection in the course of trade, would be sufficient to disentitle a person from getting small scale exemption. following the ratio of the cited decision of the hon’ble supreme court in the case of rukmani packwell traders (supra), we find that for the first period, the chewing tobacco manufactured by the appellants has to be considered as branded chewing tobacco bearing the brand name arr and hence the appellants are not entitled to exemption for this period. accordingly, we confirm the duty demand for the first period and interest payable thereon in accordance with law. as regards the penalty imposed on the appellants, considering the disputed nature of the case, we set aside the penalty. as such, appeal no. e/658/2004 is partly allowed in the above terms. 4. as for the latter period from 1.4.2004, the appellants have only indicated on the label that the impugned goods are manufactured by arr enterprise. such an indication is required to be made on the labels statutorily as also under circular no. 25/90-cx.8 dated 18.4.1990 issued by the board. the examination of the label for the latter period does not indicate that the appellants have used any brand name in respect of their product. we also find that in the case of cce vs. mahaan dairies - 2004 (166) elt 23 (sc), the hon’ble supreme court has held that when goods are sold using only the name of the manufacturing company, this would not disentitle an assessee from claiming small scale exemption. following the ratio of the cited decision of the hon’ble supreme court in the case of mahaan dairies (supra), we hold that for the subsequent period from 1.4.2004, the appellants are entitled to small scale exemption. hence, we set aside the impugned orders and allow appeal nos. e/869/2006 and e/357/2007. 5. thus, appeal no. e/658/2005 is partly allowed by setting aside the penalty imposed and appeal nos. e/869/2006 and e/351/07 are allowed.
Judgment:

1. Heard both sides.

2. The issue relates to the eligibility of the appellants for small scale exemption. “Unbranded chewing tobacco” is one of the specified goods covered under the small scale exemption notification. Branded chewing tobacco on the other hand is not covered under the scheme. Goods manufactured with the brand name of another person are also not eligible for small scale exemption. The labels used for chewing tobacco manufactured by the appellants have been examined. For the period 1.5.2003 to 31.3.2004, the appellants have used a different label. This period is covered by Appeal No. E/658/2005. The other two appeals No. E/869/2006 and No. E/351/2007 relate to the subsequent period during which different labels have been used by the appellants. All these three appeals are taken up together.

3. In the first period, the appellants have used the abbreviation “ARR” in very large letters on the label of their product whereas in the latter period they have indicated on the label “Mfrs. ARR ENTERPRISES” along with the address. After hearing both sides on the issue and perusal of the cited decisions, we find that the label used during the first period does demonstrate the use of the brand name “ARR”, which is part of the brand name of ARR Seeval Pvt. Ltd. It has been argued by the learned counsel Shri K.S. Venkatagiri that the entire trademark has not been used inasmuch as the picture in the brand name / trademark does not find a place on the labels used by the appellants during the first period. However, we find that in the case of CCE, Trichy Vs. Rukmani Packwell Traders - 2004 (165) ELT 481 (SC), the Hon’ble Supreme Court has held that even use of a part of brand name or trade name, so long as it indicates a connection in the course of trade, would be sufficient to disentitle a person from getting small scale exemption. Following the ratio of the cited decision of the Hon’ble Supreme Court in the case of Rukmani Packwell Traders (supra), we find that for the first period, the chewing tobacco manufactured by the appellants has to be considered as branded chewing tobacco bearing the brand name ARR and hence the appellants are not entitled to exemption for this period. Accordingly, we confirm the duty demand for the first period and interest payable thereon in accordance with law. As regards the penalty imposed on the appellants, considering the disputed nature of the case, we set aside the penalty. As such, Appeal No. E/658/2004 is partly allowed in the above terms.

4. As for the latter period from 1.4.2004, the appellants have only indicated on the label that the impugned goods are manufactured by ARR Enterprise. Such an indication is required to be made on the labels statutorily as also under Circular No. 25/90-CX.8 dated 18.4.1990 issued by the Board. The examination of the label for the latter period does not indicate that the appellants have used any brand name in respect of their product. We also find that in the case of CCE Vs. Mahaan Dairies - 2004 (166) ELT 23 (SC), the Hon’ble Supreme Court has held that when goods are sold using only the name of the manufacturing company, this would not disentitle an assessee from claiming small scale exemption. Following the ratio of the cited decision of the Hon’ble Supreme Court in the case of Mahaan Dairies (supra), we hold that for the subsequent period from 1.4.2004, the appellants are entitled to small scale exemption. Hence, we set aside the impugned orders and allow Appeal Nos. E/869/2006 and E/357/2007.

5. Thus, Appeal No. E/658/2005 is partly allowed by setting aside the penalty imposed and Appeal Nos. E/869/2006 and E/351/07 are allowed.