2018 (1) TMI 631 - AT - Central Excise

Appellant entitled to SSI exemption for job work printing diaries distributed as gifts

M/s Neat Prints Versus Commissioner of Central Excise & Customs, Aurangabad

The Tribunal held that the appellant, engaged in job work activity for printing diaries for LIC, was entitled to the SSI exemption under Notification No. ... SSI exemption - use of brand name of others - It appeared to revenue that the SSI exemption is not available to the appellant as they have manufactured table diaries for LIC with the logo of LIC - Held that: - it is admitted fact that the diaries manufactured by the appellant for LIC have not been traded by LIC - the appellant is entitled to exemption under Notification No. 8/2003 CE read with Circular No. 71/71/94 CX dated 27/10/1994 - appeal allowed. Issues:1. Entitlement to SSI exemption under Notification number 8/2003 CE.Analysis:The appellant, engaged in job work activity of printing, binding, and preparing branded table diaries, was under scrutiny for not paying duty on the goods cleared to LIC. The appellant was registered as an SSI unit and had manufactured table diaries for LIC with the LIC providing major raw materials directly to the appellant. The appellant contended that the printed diaries were distributed as complimentary gifts and not traded, thus not falling under the brand name provision of Notification number 8/2003 CE. Reference was made to Circular No. 71/71/94 CX clarifying the conditions for the brand name provision to apply. The appellant argued that since the diaries were not traded by LIC, they were entitled to the SSI exemption.Further, the appellant received job charges per diary and contended that being an SSI unit with a turnover below one crore, central excise duty did not apply to them. The appellant's proprietor stated that they were not aware of the Central Excise Law and Procedures. The appellant highlighted that the brand name provision should only apply if there is a trade connection between the branded goods and a person using the brand name in the course of trade. The appellant's counsel argued that since there was no allegation that LIC traded in the diaries, they should be exempt under Notification No. 8/2003 CE.After considering the contentions, the Tribunal found that the diaries manufactured by the appellant for LIC were not traded by LIC. Therefore, the Tribunal held that the appellant was entitled to the exemption under Notification No. 8/2003 CE along with Circular No. 71/71/94 CX. The appeal was allowed, and the impugned order was set aside, granting the appellant consequential benefits in accordance with the law.