Loose cookies linked to brand not exempt from SSI, Revenue appeal successful.

The Apex Court ruled that even cookies sold loose from the respondents' outlets were not eligible for the SSI exemption. The Tribunal found that the cookies, although not physically stamped with the brand name, maintained a clear connection with the brand and were considered branded goods. Therefore, the respondents were not entitled to the SSI exemption on loose cookies sold in their outlets. The Revenue's appeal was allowed, setting aside the impugned order and restoring the Order-in-Original in favor of the Revenue.

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Issues:
Whether the respondents are eligible for the benefit of SSI exemption on cookies sold loose in their outlets.

Analysis:
The respondents were engaged in the manufacture of cookies and cleared them under Central Excise Tariff heading 1905.11. They sold branded cookies, loose cookies in empty boxes, and loose cookies in paper plates and napkins. The department contended that cookies sold in paper plates and napkins should be treated as branded cookies and not eligible for exemption under Notification No.8/2003. A show cause notice was issued, and after due process, duty demand was confirmed. In appeal, the Commissioner held that the respondents were eligible for the SSI exemption. However, the department argued that a similar case had been decided in their favor by the Tribunal. The issue was whether the respondents qualified for the SSI exemption for loose cookies sold in their outlets. The respondents had an exclusive shop and a license agreement with a brand. The Apex Court ruled that even cookies sold loose from their outlets were not eligible for the SSI exemption.

The Tribunal held that goods need not be stamped with a brand name to be considered branded under the SSI notification. The circumstances surrounding the sale were crucial, and selling the same branded cookies in different forms did not change their branded nature. The environment in which the goods were sold was considered, and the presence of the brand name in the business operations was sufficient to classify the cookies as branded, even if not physically stamped with the brand name. The Tribunal found that the cookies sold without the brand name inscription still maintained a clear connection with the brand and could not claim exemption under the SSI Notification. Consequently, the demand was upheld, the impugned order was set aside, and the Order-in-Original was restored, allowing the appeal filed by Revenue.

In conclusion, the Tribunal ruled in favor of the Revenue, holding that the respondents were not eligible for the SSI exemption on cookies sold loose in their outlets, as the cookies maintained a clear connection with the brand name under which they were manufactured and sold.

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