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of <h1>CEGAT Chennai allows appeals, emphasizing brand interpretation in excise matters.</h1> <h3>SWATHE INDUSTRY Versus COMMISSIONER OF C. EX., CHENNAI</h3> SWATHE INDUSTRY Versus COMMISSIONER OF C. EX., CHENNAI - 2001 (131) E.L.T. 345 (Tri. - Chennai) Issues:Alleged evasion of duty under Notification 175/86-C.E., dated 1-3-1986 due to affixing brand name 'MF' on brake drums supplied to M/s. TAFE.Detailed Analysis:Issue 1: Alleged Evasion of DutyThe central issue in this case revolves around the alleged evasion of duty by M/s. Swathy Industry and M/s. Gopal Naicker & Sons under Notification 175/86-C.E., dated 1-3-1986. The appellants were accused of affixing the brand name 'MF' on brake drums supplied to M/s. TAFE, which was owned by the latter and rendered them ineligible for exemption under the said notification. The Collector of Central Excise found that the embossing of 'MF' on the brake drums indicated a connection in the course of trade between the goods and TAFE, leading to the demand for a significant amount of differential duty. The appellants contested these charges, arguing that 'MF' was not the brand name of TAFE and that they supplied the brake drums only as original equipment, not as spare parts or for open market sale.Issue 2: Interpretation of Brand NameA critical aspect of the case involved the interpretation of what constitutes a brand name or trade name under Explanation VIII of Notification 175/86-C.E., dated 1-3-1986. The appellants maintained that the mere embossing of 'MF' on the brake drums did not meet the criteria of a brand name or trade name as per the notification. They presented the brand/trade names of TAFE, emphasizing the distinction between those and the letters 'MF' embossed on the brake drums. The appellants argued that the 'MF' logo did not establish a connection in the course of trade with TAFE, as required by the notification, thereby challenging the Collector's findings.Issue 3: Use of Goods in TradeAnother crucial point of contention was whether the brake drums supplied by the appellants were used in the market by TAFE as spares or only as original equipment in the assembly of tractors. The appellants asserted that the 'MF' and part numbers were affixed for identification purposes and that the brake drums were not traded in the market as spare parts. Citing precedents and the decision in Prakash Industries, the appellants argued that supplying branded goods exclusively to customers and not trading them in the market did not constitute the use of the brand name in the course of trade, thus entitling them to the exemption under the notification.In conclusion, the Appellate Tribunal, CEGAT, Chennai allowed both appeals, setting aside the orders passed by the lower authority. The Tribunal held that the embossing of 'MF' on the brake drums did not establish a connection in the course of trade with TAFE as required by the notification, thereby entitling the appellants to the exemption under Notification 175/86-C.E., dated 1-3-1986. The decision underscored the importance of a clear interpretation of brand names, the use of goods in trade, and adherence to the provisions of the relevant notifications in excise matters.
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