TaxTMI 
TaxTMI 
2016 (2) TMI 535
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....tion and direct the Registry to amend the cause title of respondent as Commissioner of Central Excise & Service Tax, LTU, Chennai 3. The brief facts of the case are that the appellants are engaged in the manufacture of Branded jewellery falling under Chapter 7113 under brand name "Tanishq" and unbranded jwellery and registered with Central Excise and discharging duty on Branded Jewellery. Appellants were issued two show-cause notices No.22/2009 dated 3.3.2009 and SCN No.76/2009 dt. 30.11.2009 demanding excise duty on the Branded jewellery. It was alleged in the show-cause notices that the appellant have affixed the mark Q and I on the jewellery and cleared without payment of duty. Further, it was alleged that the appellants were paying excise duty on the branded jewellery under the brandname Tanishq and paid duty @ 2% advelorem for the clearances made upto June 2006. Thereafter, appellant stopped using the brand name Tanishq and started using the mark Q and I and the jewellery were cleared and sold in the market, therefore the mark Q and I represents brand name or trade name. 4. The adjudicating authority in the impugned order, after following the principles of natural justice, c....
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....esents identifying GoldPlus category of jewellery. 6. He drew attention of the Board s Circular dated 29.12.2005 and submitted that the instruction of the Board s circular has not been followed by the adjudicating authority. As per the circular, Board has categorically directed the field formation that if the Commissioner has any doubt and is not in a position to decide whether a particular jewellery is a branded jewellery or not, or when the jeweller contests that the jewellery sold by him is not branded jewellery, in such cases, the Chief Commissioner should forward all such references to the Board by addressing to the Member, Central Excise for his comments. Till such time, the matter is decided by the Board no precipitate action should be taken to charge excise duty on such jewellery. He submits that when such clear cut instruction was given by the Board, the Commissioner should have referred to the Board through the Chief Commissioner as they have contested and also informed the authority that they were not using the brand name TANISHQ with effect from 1.7.2006 and were clearing unbranded jewellery. He drew attention to the Grounds of Appeal para 3 at page 8 and submits that ....
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.... the jewellery is nothing but to identify the jewellery and it is done by the jeweller so as to identify the authenticity of the jewellery. In view of para 2(ii) of Board circular, he submits that use of identification mark Q and I cannot be construed as jewellery was cleared under the brand name. He submits that Commissioner has not given any finding on the Board s circulars. 9. He drew the attention of the Bench to Circular dated 25.3.2011 and he referred to para 5.2.1 wherein Board once again clarified and reiterated again when the levy was re-introduced to branded jewellery where use of alphabets or numbers (only stylized) cannot be registered as a brand name or trade mark. This is again for identification when the customer returns of the jewellery. Board clarified that it will not attract levy. He drew attention to another Board s circular dated 2.3.2012 para 5 wherein Board has categorically clarified that excise duty is leviable on jewellery on which trade/brand name or any such mark or symbol is affixed or embossed on the jewellery. Board further clarified that if such brand name is not affixed or embossed on the jewellery or on article itself but appears on the packing su....
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....d subsequently Department sought series of clarification which was gain replied. Subsequently, the audit carried out investigation on 24.2.2009. He drew attention to para 7 of show-cause notice which is at page 130 of the appeal paper book wherein it has been alleged mis-declaration and suppression of facts. Whereas in the impugned order, in para 21, the adjudicating authority holds that the assessment of duty on the jewellery was provisional from March 2005 to March 2006 07 which is totally contradictory to the allegations made in para 7 of the show-cause notice. On limitation, he relied on the following decisions:- (a) CCE Vs. Chemphar Drugs & Liniments Ltd. 2002-TIOL-266 (b) Anand Nishikawa Co. Ltd. Vs. CCE 2005 (188) ELT 149 (c) Pushpam Pharmaceuticals Company Vs. CCE 1995 (78) ELT 401 (d) Continental Foundation JV Vs. CCE 2007 (216) ELT 177 Therefore, he submitted that there is no suppression of facts and hence no penalty can be imposed. 13. The learned Special Counsel Shri Shridharraman appearing on behalf of Revenue submitted his paper book and written synopsis on the Grounds of Appeal and the citations relied and reiterated the findin....
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....is an important factor. Regarding penalty, he submitted that no penalty imposed under section 11AC. Penalty was imposed only under Rule 25 and the adjudicating authority has correctly imposed the penalty. He relied on the following decisions:- (a) D.K. Arrawala Vs. CCE, Mumbai 2011 (138) ELT 684 (b) Marsha Pharma Pvt. Ltd. Vs. CCE, Vadodara 2009 (248) ELT 687 (c) Hind Nippon Rural Industries Ltd. Vs. CCE, Bombay 2011 (136) ELT 1289 (d) Granite (India) Ltd. Vs. CCE, Coimbatore 1997 (92) ELT 84 (e) CCE Vs. Grasim Industries Ltd. 2005 (183) ELT 123 (SC) (f) CCE, Chennai Vs. Australian Foods (India) Pvt. Ltd. 2013 (287) ELT 385 (SC) (g) Commissioner of Customs Vs. Phoenix International Ltd. 2007 (216) ELT 503 (SC) 15. In his rejoinder, learned Senior Advocate countered the arguments of Revenue and submits that when the matter is being heard at final hearing, the Tribunal s interim order cannot be taken as precedent. He submits that the Board s circular are mandatory which is binding on the authorities and proper course is that the adjudicating authority should have referred to the Board as per the Board s circular dated 29.12.200....
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....ed to the Board. In the present case, we find that the adjudicating authority had no doubt on the issue and there was no seizure and regular show cause notices were issued and the charges/allegations were brought out in the said notices for demanding excise duty on branded jewellery. Therefore, we do not find any merit in the appellant's plea. We hold that the Commissioner of Central Excise had not violated the Board's circular and duly followed the principles of natural justice in this case. 19. We now deal with the merits of the case, whether the jewellery manufactured and cleared by appellant is a branded jewellery and chargeable to excise duty or not. It is pertinent to see the history of levy of excise duty on gold jewellery. Articles of gold jewellery are classifiable under Chapter 71 of Central Excise Tariff Act and it was fully exempted from excise duty by Notification 6/2002 dt. 1.3.2002 (S.No.171). 20. In 2005-06 Budget, the government imposed excise duty of 8% on branded articles of jewellery of Heading 7113 of Central Excise Tariff. The duty is leviable only on the jewellery where the brand name or trade name indelibly affixed or embossed on the articles of je....
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....red with Central Excise and paid excise duty on the branded jewellery cleared under the brand name "TANISHQ". Subsequently the appellants decided not to use the logo of "TANISHQ". Instead, they started using the letter "Q" for jewelleries which were earlier cleared under the brand name "TANISHQ" and under letter "I" for the jewelleries cleared under the brand name "GoldPlus" respectively. 21. On perusal of the photographs of the branded jewellery reproduced in the OIO and copies produced by appellant before Tribunal, we find that letters "Q" and "I" are indelibly embossed on the jewellery. These marks "Q" & "I" are embossed on the jewellery in place of 'TANISHQ' and "GoldPlus" brands. The appellant's only contention that since they stopped using the logo of "TANISHQ" on the jewellery it is not chargeable to duty as branded jewellery and heavily relied the Board's circular No.354/38/2011-TRU dt. 2.3.2012 and Circular No. B-1/1/2005-TRU dt. 4.3.2005. Board's circular dt. 2.3.2012 is reproduced as under :- Branded precious metal jewellery Levy of Excise duty Clarifications Instruction F. No. 354/38/2011-TRU, dated 2-3-2012 Government of India Minist....
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....ibly affixed or embossed on the articles of jewellery itself. 4. It is clarified that the excise duty leviable on precious metal jewellery, manufactured or sold under a brand name, is attracted only on such jewellery on which the trade/brand name or any such mark or symbol or even a number which is cross referred with such trade/brand name (not being a house mark used by jewellers for identification of jewellery at the time of exchange/resale) is indelibly marked or embossed. If such brand name is not affixed or embossed on the jewellery or article itself but appears on the packing such as the jewellery box or pouch or even on the warranty card or certificate of quality, such goods will not be treated as branded jewellery and thus will not be liable to excise duty. The clarification issued in this regard vide D.O.F. No. B-1/3/2011-TRU, dated 25th March, 2011 stands modified to this extent." Board's Circular dt. 4.3.2005 is reproduced as under :- Government of India Ministry of Finance (Department of Revenue) Tax Research Unit Subject : Excise duty levy on branded articles of jewellery. In this year's budget 2005-06, an excise duty of 2% has been imposed on brande....
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.... of fact, and can be ascertained as how the name is understood in commercial parlance. In the jewellery trade, there are certain well known brand names like 'Tanishq', 'Sangini', etc. and the scope of the levy is only with respect to jewellery marketed and sold under such brand names as clearly, understood in the trade. It is requested that the gold dealers/manufacturers associations may be suitably briefed about the scope of the excise duty levied on branded articles of Jewellery so that there is no inconvenience to the trade. Yours faithfully -Sd/- V. Sivasubramanian Deputy Secretary (TRU) Tele No.23092236 As seen from the above Board circulars, the Government has clarified that excise duty is leviable on articles of jewellery where brand name or trade name is indelibly affixed or embossed on the articles of jewellery and duty is not leviable on any jewellery which do not themselves bear any marking of trade name or brand name. The appellants, in the present case, embossed the mark or symbol or letter 'Q" and "I" on the jewellery and it is in connection with sale of goods indicating the goods belonged to the appellant. The very fact that the goods b....
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.... worded to the definition of brand name given in the SSI exemption notification. The Hon'ble apex Court in the case of CCE Trichy Vs Grasim Industries Ltd.(supra) and held laid down the principle which clearly held that a name or writing need not be a brand name or trade name in a sense it is normally understood. Even ordinary mark or letter is sufficient to indicate a connection between the product and the company. The relevant paragraphs of apex court's decision in the case of CCE Trichy Vs Grasim Industries Ltd. 2005 (183) ELT 123 (SC) are reproduced as under :- "16. This Court has, in the case of Royal Hatcheries Pvt. Ltd. v. State of A.P. reported in 1994 Supp (1) SCC 429, already held that words to the effect that is to say qualify the words which precede them. In this case also the words that is to say qualify the words brand name or trade name by indicating that these terms must therefore be understood in the context of the words which follow. The words which follow are of wide amplitude and include any word, mark, symbol, monogram or label. Even a signature of an invented word or any writing would be sufficient if it is used in relation to the product for purpose....
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....e a trade name or brand name as commonly understood. Any name or mark or writing, even the name of a company is sufficient so long as it is used for the purpose of indicating a connection between the product and that Company. The use of the words A quality product from ITL group clearly showed an intention to show a connection between the product and the ITL group. These words indicated that the quality of the product was the same as that of a product of ITL group. If use of such words did not disentitle a party from the benefit of the Notification, we fail to understand what sort of words would disentitle a party. The decision of the Tribunal in this case is clearly erroneous and will stand overruled. 19. In this view of the matter, we set aside the impugned Judgment and restore the Order passed by the Commissioner of Central Excise dated 19th May, 1999." The learned Commissioner in his findings had relied the above judgement. Though the above decision is related to SSI exemption, the ratio of apex Court is squarely applicable to the present case as the supreme court clearly spelt out the scope of brand name and trade name and clarified by the words "that is to say a name....
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....ere cleared and marketed by the appellant s own "Tanishq" show rooms and exclusive show rooms and it is admitted by the appellant that these products were marketed only through their "Tanishq" outlets and the invoices bear the brand name of Tanishq . Appellant themselves have admitted vide their letter dt.6.7.2006 that bills and certificate of authenticity were issued in the name of Tanishq and outer cover of the bags bears the brand name of Tanishq . In this regard, the Hon ble Supreme Court in their recent judgement in the case of CCE Chennai Vs Australian Foods India (P) Ltd. (supra) clearly held that brand name physically manifestation on the goods is not a compulsory requirement. The apex Court held that brand name cannot be reduced to a label or sticker embossed on the goods and held that the test of whether the goods branded is an indication of connection conveyed in the course of trade between the goods and the person using the brand name. The relevant paragraphs of the apex court's decision in the case of CCE Chennai Vs Australian Foods India (P) Ltd. are reproduced as under:- 14. We feel that to hold from the above passages that every goods must be physically stampe....
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....at one not marked by any brand is an unbranded goods, is untenable. In case a scrutiny of the goods itself fails to reveal a brand name then the search must not end there; one ought to look into the surrounding circumstances of the goods to decipher, if it is in fact branded or not. 15. We are of the opinion that such an approach is necessary to maintain the essence of the concept of a brand name. A brand/trade name must not be reduced to a label or sticker that is affixed on a goods. The test of whether the goods is branded or unbranded, must not be the physical presence of the brand name on the goods, but whether it, as Explanation IX reads, is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of the person. Therefore, whether the brand name appears in entirety or in parts or does not appear at all cannot be the chief criterion; primary focus has to be on whether an indication of a connection is conveyed in the course of trade between such specified goods and some person using the mark.....
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....hing the words of the notification or by adding words to the notification benefit cannot be conferred. The Tribunal has based its decision on a decision delivered by it in Rukmani Pakkwell Traders v. CCE (1999) 109 E.L.T. 204 (CEGAT). We have already overruled the decision in that case. In this case also we hold that the decision of the Tribunal is unsustainable. It is accordingly set aside. 17. As aforesaid, once it is established that a specified goods is a branded goods, whether it is sold without any trade name on it, or by another manufacturer, it does not cease to be a branded goods of the first manufacturer. Therefore, soft drinks of a certain company do not cease to be manufactured branded goods of that company simply because they are served in plain glasses, without any indication of the company, in a private restaurant. The goods will continue to be a branded goods of the company that manufactured it. The same principle would apply in the case of potato chips, chocolates, biscuits, wafers, powders and other such goods often sold from various locations. 18. In case of goods sold from exclusive single brand retail outlets or restaurants or stores, the fact that a goods....
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....ce it is established, as in the instant case, that the environment of the goods can be gone into to construe if it is branded or not, we do not see why the environment of the goods should be limited to the plates and tissues, on which they are served. As aforesaid, in the instant case, the cookies were sold from a dedicated outlet of Cookie Man where no other products but those of the assessee were sold. The invoices carry the name of the company and the cookies were sold from a counter of the store. In our opinion, the store s decision to sell some cookies without containers that are stamped with its brand or trade name does not change the brand of the cookies. We are convinced that the cookies sold even without inscription of the brand name, indicate a clear connection with the brand name, in the course of assessee s business of manufacture and sale of cookies under the brand name Cookie Man . They continue to be branded cookies of Cookie Man and hence cannot claim exemption under the SSI Notification. The ratio of the above apex court decision is squarely applicable to the facts of the present case as these gold jewelleries are sold in exclusive Tanishq show rooms and the invoi....