2015 (10) TMI 1569 - AT - Central Excise

Tribunal: Jute bags not exempt, penalties set aside, matter remanded for re-computation

M/s The Hooghly Infrastructure Pvt Ltd, M/s RDB TEXTILES LTD And Others Versus Commissioner of Central Excise and Others

M/s The Hooghly Infrastructure Pvt Ltd, M/s RDB TEXTILES LTD And Others Versus Commissioner of Central Excise and Others - 2015 (329) E.L.T. 142 (Tri. - ... Issues Involved:1. Eligibility for exemption under Notification No. 30/2004-CE as amended by Notification Nos. 12/2011-CE and 30/2011-CE.2. Definition and interpretation of 'brand name' under Chapter 63 of CETA, 1985.3. Applicability of extended period of limitation and imposition of penalties.4. Correct computation of duty demand.Issue-wise Detailed Analysis:1. Eligibility for Exemption under Notification No. 30/2004-CE as Amended by Notification Nos. 12/2011-CE and 30/2011-CE:The appellants manufactured jute bags and claimed exemption from duty under Notification No. 30/2004-CE, as amended. The exemption was denied on the grounds that the jute bags bore brand names or were sold under brand names, which disqualified them from the exemption. The Tribunal examined whether the jute bags, printed with particulars such as the buyer's name, logo, and other details, constituted 'branded goods' under the exemption notifications. It was determined that the printed particulars on the jute bags met the definition of 'brand name' as per Chapter Note (iv) of Chapter 63 of CETA, 1985, thus making them ineligible for the exemption.2. Definition and Interpretation of 'Brand Name' under Chapter 63 of CETA, 1985:The Tribunal referred to Chapter Note (iv) of Chapter 63, which defines 'brand name' as a name or mark used to indicate a connection in the course of trade between the product and the person using such name or mark. The Tribunal held that the printed particulars on the jute bags, including the buyer's name and logo, indicated a connection in the course of trade between the product and the buyer, thereby qualifying as a 'brand name.' The Tribunal relied on the Supreme Court's judgment in Kohinoor Elastics Pvt. Ltd. vs. CCE, which established that affixing a brand name of another person on goods disqualifies the manufacturer from availing the exemption.3. Applicability of Extended Period of Limitation and Imposition of Penalties:The Tribunal found that the issue primarily involved the interpretation of the term 'brand name' under the relevant notifications. Given that the appellants had printed the particulars on the jute bags as per the directions of the Jute Commissioner and that all facts were within the knowledge of the department, the Tribunal held that the extended period of limitation was not applicable. Consequently, the imposition of penalties under Section 11AC of the Central Excise Act, 1944, was set aside. The Tribunal directed that the duty demand should be recomputed for the normal period of limitation.4. Correct Computation of Duty Demand:The appellants contended that the computation of duty demand was erroneous and that their grievances regarding excessive demand were not addressed by the adjudicating authority. The Tribunal acknowledged these contentions and directed the adjudicating authority to re-compute the duty demand and interest for the normal period, taking into consideration the appellants' grievances regarding computation errors. The Tribunal remanded the matter to the adjudicating authority for re-computation.Conclusion:The Tribunal concluded that the jute bags manufactured by the appellants, printed with particulars of other persons, were not eligible for exemption under Notification No. 30/2004-CE as amended. The Tribunal set aside the imposition of penalties and the confirmation of demands for the extended period of limitation. The matter was remanded to the adjudicating authority for re-computation of the duty demand and interest for the normal period, addressing the appellants' grievances regarding computation errors. The appeals were partly allowed to this extent.