2000 (4) TMI 626 - AT - Central Excise

Tribunal: TISCON labels impact SSI exemption. Remand for clearance value assessment. Differential duty calculation ordered.

The Tribunal held that the packing of CTD bars with TISCON labels amounted to clearance of branded goods eligible for exclusion from the aggregate ... SSI Exemption - Value of Clearances Issues:Classification of goods as branded goods under Central Excise Rules - Eligibility for SSI exemption under Notification No. 1/93 - Imposition of duty and penalty based on clearance value.Analysis:1. The case involved the classification of CTD bars and rods manufactured on job work basis for a company as branded goods under Central Excise Rules to determine eligibility for the Small Scale Industries (SSI) exemption under Notification No. 1/93. The appellants claimed the benefit of Explanation III to the SSI Notification, which excludes the clearance of specified goods bearing a brand name from the computation of aggregate clearance value.2. A show cause notice was issued to the appellants alleging that they had crossed specified clearance thresholds and should have paid duty at varying rates. The Assistant Collector held that the goods manufactured on job work basis were not branded goods and imposed duty and penalties accordingly.3. The appellants appealed to the Collector (Appeals) who upheld the finding that the goods were not branded. However, in a separate issue related to duty calculation, the Collector remanded the case to the Assistant Commissioner for re-calculation based on the appellants' argument regarding the inclusion of raw material duty in the assessable value.4. The Assistant Collector re-calculated the duty demand and imposed penalties, which were confirmed in the appeal. The appellants then filed further appeals challenging the classification of goods as not branded.5. During the hearing, the appellants argued that the goods manufactured for the company bore a brand name, TISCON, as indicated by the tags on the bundles. They contended that the use of the brand name indicated a connection in the course of trade between the goods and the company.6. The Tribunal referred to precedents where affixing a brand name on containers or packing material was considered equivalent to affixing it on the goods themselves. Relying on these precedents, the Tribunal held that the packing of CTD bars with TISCON labels amounted to clearance of branded goods eligible for exclusion from the aggregate clearance value for SSI exemption.7. The Tribunal remanded the case to ascertain whether all CTD bars manufactured for the company bore the TISCON label. If some clearances were found without the label, their value would be included in the aggregate clearance. The Tribunal also directed the calculation of any differential duty owed and adjustment of duty already paid based on previous decisions.8. Ultimately, the Tribunal set aside the previous orders and allowed the appeals by way of remand for further verification and calculations in line with the legal principles established regarding the classification of goods as branded under the Central Excise Rules.