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2016 (2) TMI 535
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....ingly, we allow the miscellaneous application 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 f....
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.... explained AE represented job worker and I represents 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 Gro....
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....y and will not attract tax. He submits that the letters Q and I affixed on 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 ....
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....ewellery in the paper book Volume I and submitted that they duly intimated on 19.9.2005 and 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 R....
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....LT 503 (SC) and drew attention to para 11 of the judgment, wherein the Hon ble Supreme court held that intention of the appellant 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....
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.... said circular, it is stated that when the Commissioner is in doubt and not in a position to decide whether a particular jewellery is branded jewellery or not, such cases should be referred 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 ar....
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....and name and trade name is identically worded in both Chapter Note-12 and in the notification and the definition is unambiguous. It has been clearly brought out in the findings of the adjudicating authority that appellants were duly registered 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-1/1/2....
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.... The issue has been examined. Condition no. 8 of notification no. 5/2006-C.E., dated 1-3-06, is also relevant in this regard. The said condition provides that the exemption shall not be applicable to articles of jewellery of heading no. 7113 on which brand name or trade name is indelibly 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." ....
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....etermination and official recording of the proportionate content of precious metal in gold. Hallmarks are thus only official marks used as a guarantee of purity or fineness of gold jewellery, and cannot be treated as 'branding' for the purposes of the excise levy. 4. Whether a particular name or mark or symbol etc. is a brand name or not is a matter 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 nam....
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....ut replacement of one logo with other mark on the same product. Therefore the appellants relying Illustration II of Board's circular that they have only used these letters Q and I only for the purpose of identification is not justified and not applicable to the appellant s case. Further, we find that definition of brand name given in Chapter Note 12 and the Explanation to the notification are similarly 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 th....
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....rom Instrument Techniques Pvt. Ltd. The expression A quality product from ITL group also would not mean that the product was manufactured by Instrument Techniques Pvt. Ltd. According to us, the facts of the case are more akin to the facts in Weigand India (P) Ltd. and Chemguard Coatings Pvt. Ltd. rather than Chopra Appliances. In our view, the Tribunal was clearly erroneous. As indicated above, the Explanation makes it clear that it need not be 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....
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....lant embossed with the mark of Q & I clearly satisfies the definition of branded jewellery defined in Chapter Note 12 of Chapter 71 of CET and the Explanation to the notification No.4/2005 and chargeable to excise duty. The demand of the differential duty confirmed by the adjudicating authority in the impugned order is liable to be upheld. 25. Notwithstanding to our above findings, we also find from the findings of adjudicating authority that these jewelleries were 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 c....
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.... the confines of Para 4 of the notification; looking beyond the specified goods to consider whether it is an input or not is not necessary in case of a conspicuous brand name. However, to apply this principle to the scenario of a specified goods that does not contain a brand name at all would be equivalent to fitting a square peg in a round hole. If a final product is marked or stamped with a brand name, it is clearly a branded goods; to stretch this principle to imply that 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 ....
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....ong as the trade name or brand name of some other company is used the benefit of the notification would not be available. Further, in our view, once a trade name or brand name is used then mere use of additional words would not enable the party to claim the benefit of the notification. 8. It is settled law that in order to claim benefit of a notification, a party must strictly comply with the terms of the notification. If on wording of the notification the benefit is not available then by stretching 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....
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....rrying brand name duty is paid. It is interesting to note that learned counsel appearing on behalf of the assessee first argued that to determine if the cookies sold from the counter are branded or not, scrutiny must be limited to the case of the cookies themselves without looking at the surrounding circumstances; yet went on to argue that the tissues and plates they were served on did not bear the brand of the specified goods. Either the environment of the goods can be looked into, or cannot be taken into consideration at all. Once 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 co....