1999 (9) TMI 180 - AT - Customs

Tribunal Denies Exemption to 'Ravi' Fan Makers

The Tribunal ruled against the appellants, a small-scale unit manufacturing electric fans with the brand name 'Ravi,' in their appeal seeking exemption ... Value of clearances - Computation of Issues involved:Whether the value of goods cleared with a brand name should be excluded while computing the aggregate value of clearance for the purpose of availing exemption under Notification No. 1/93 for a specific financial year.Analysis:The appeal questioned whether the value of goods cleared with a brand name should be excluded when calculating the aggregate value of clearance for the purpose of availing exemption under Notification No. 1/93 for the financial year 1992-1993. The appellants, a small-scale unit manufacturing electric fans with the brand name 'Ravi,' were denied the benefit of the notification as their clearance value exceeded Rs. 2 crores in the preceding financial year. The Commissioner (Appeals) upheld this decision, stating that the brand name owner was eligible for the exemption, making the Explanation III inapplicable. The appellants argued that the value of clearances should not include goods affixed with another person's brand name, citing relevant legal decisions. The Revenue contended that the notification should be strictly construed in favor of the State, emphasizing the wording of Explanation III. They argued that since the notification was not in effect during the relevant year, the Explanation did not apply.The Tribunal analyzed the provisions of Notification No. 1/93, which set the threshold for exemption based on the aggregate value of clearances in the preceding financial year. Explanation III excluded clearances of goods affixed with a brand name of another person not eligible for exemption. The Tribunal noted that the brand name owner was eligible for the exemption, rendering Explanation III irrelevant. They differentiated this case from previous decisions concerning the interpretation of specific phrases in notifications. The Tribunal concluded that the appellants were not eligible for the exemption for the financial year 1993-1994 based on the circumstances and upheld the decision of the Commissioner (Appeals) to reject the appeal.In summary, the issue revolved around the interpretation of the Notification No. 1/93 regarding the exclusion of goods cleared with a brand name when calculating the aggregate value of clearance for exemption purposes. The Tribunal clarified the applicability of Explanation III in light of the brand name owner's eligibility for exemption, ultimately ruling against the appellants' claim for exemption for the relevant financial year.