1980 (4) TMI 109 - CGOVT - Central Excise

Manufacturer's Exemption Upheld in Dispute Over Manufacturing Arrangements

The manufacturer of aerated waters, enjoying exemption under Notification No. 82/74, faced a challenge regarding manufacturing arrangements with Parles ... Manufacture for or on behalf of - Use of third party's brand name - Effect Issues involved: Interpretation of Notification No. 82/74 for exemption from Central Excise duty based on manufacturing arrangement with Parles Bottling Company.Summary:1. The party, a manufacturer of aerated waters, was enjoying exemption u/s Notification No. 82/74 due to power usage conditions. As per Franchise Agreement with Parles, they manufactured aerated waters under the brand name 'Parles'. Asstt. Collector held them to be manufacturing for Parles, exceeding power limit, thus not eligible for exemption. 2. On appeal, the Appellate Collector ruled in favor of the party, stating they were not manufacturing for Parles, hence eligible for the concession under Notification No. 82/74. 3. Government of India, u/r section 36(2) of Central Excises and Salt Act, initiated suo motu revision to review the Appellate Collector's order, issuing a show cause notice to the party based on proposed grounds for review. 4. Party contended they were independent manufacturers, not related to Parles, complying with all legal requirements. Citing precedents and legal provisions, they argued against the review, emphasizing their status as the actual manufacturer of the goods. 5. After considering submissions, Government observed party's independence from Parles, being licensed manufacturers assessed for taxes independently. They concluded that the party, not Parles, was the manufacturer as per legal definitions and precedents, upholding the order-in-appeal and dropping the review proceedings. 6. Government's decision was based on the distinction between manufacturer and brand owner, emphasizing the party's autonomy in production and sale of goods, irrespective of the brand name association. 7. Consequently, Government upheld the order-in-appeal, affirming the party's eligibility for the exemption under Notification No. 82/74, and concluded the review proceedings in favor of the party.