Appeals Allowed for Exemption Despite ITC House Mark on Raw Materials /86

The Tribunal and Vice President allowed the appeals, determining that the appellants were entitled to the exemption despite the presence of the ITC house mark on the raw materials. They emphasized that since the appellants did not affix the brand name themselves and the containers were intended for a different product, they met the criteria for the exemption under Notification 175/86. The judgments cited supported this position, leading to the allowance of the appeals with consequential relief.

---

---

Issues:
Whether the appellants are entitled to the benefit of exemption Notification for small scale industries under Notification 175/86, dated 1-3-1986 despite using raw materials with the house mark of another company on them.

Analysis:
In the present case, the appellants, who are manufacturers of printed paper containers, received Duplex-Boards from M/s. ITC Ltd. with the ITC house mark printed on the inner flap. The lower authorities denied them the benefit of the exemption Notification, citing that the appellants affixed the trade name or symbol of M/s. ITC Ltd. on the containers, making them ineligible for the exemption under the Notification. The department issued a show cause notice for differential duty and imposed penalties under the Central Excise Rules.

The appellants argued that they did not print the ITC house mark themselves but received the boards with the emblem for identification purposes. They contended that the containers were already printed for another company, McDowell's, for liquor packing, and the ITC mark was not a trade name or brand name for the liquor. They relied on a previous Tribunal case and a Supreme Court judgment to support their claim that not affixing the trade name exempts them from para 7 of the Notification.

Upon careful consideration, the Tribunal found merit in the appellants' arguments. They noted that the appellants did not affix the ITC mark themselves, and the containers were intended for liquor packing with the liquor company's name and brand, not ITC's. Drawing from previous judgments, including one by the Supreme Court, the Tribunal concluded that the benefit cannot be denied when the manufacturer does not affix the brand name, as in this case. Therefore, the impugned orders were set aside, and the appeals were allowed based on the established legal principles.

In a separate assent, the Vice President observed that the emphasis should be on whether the specified goods carry the brand name or trade name of a person ineligible for the exemption. It was clarified that the act of affixing includes any form of indication of the brand name or trade name, regardless of when it occurs in the manufacturing process. Referring to a previous Tribunal case and its Supreme Court confirmation, the Vice President allowed the appeals, emphasizing the importance of preventing undue advantage to larger units at the expense of small scale industries.

In conclusion, the Tribunal and the Vice President concurred that the appellants were entitled to the exemption despite the presence of the ITC house mark on the raw materials, as they did not affix the brand name themselves and the containers were intended for a different product. The judgments cited supported the appellants' position, leading to the allowance of the appeals with consequential relief.

---