Brand name exemption barred for branded clearances; duty sustained and penalty reduced under Notification No. 175/86-C.E.

Goods cleared under a trader's brand name were treated as ineligible for exemption under Notification No. 175/86-C.E., because para 7 barred the benefit where the brand name belonged to a person not entitled to the exemption. The Tribunal applied the earlier precedent on branded clearances and found no evidence that the brand name belonged to the manufacturer. The duty demand was therefore sustained. On penalty, the Tribunal considered the surrounding facts and reduced it to Rs. 5,000.

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Issues: Whether goods cleared under the brand name of a trader were ineligible for exemption under Notification No. 175/86-C.E. under para 7, and whether the demand of duty and penalty were sustainable.

Analysis: The appellant manufactured stamp pads and stamp pad ink and used a brand name belonging to a trader. The Tribunal treated the case as governed by the same principle applied in earlier precedent concerning para 7 of Notification No. 175/86-C.E., namely that use of a brand name owned by a person not entitled to the exemption attracts the bar under the notification. On the materials before it, the Tribunal found no proof to support the claim that the brand name belonged to the appellant. The duty demand was therefore upheld. As regards penalty, the Tribunal considered the surrounding facts and found that a reduced penalty was appropriate.

Conclusion: The exemption was held to be unavailable for the branded clearances, the duty demand was sustained, and the penalty was reduced to Rs. 5,000/-.

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