TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 370
X X X X Extracts X X X X
X X X X Extracts X X X X
....od 2000-2001 to 2004-2005, it was found that the respondent is clearing goods of other buyers M/s Spark Electrodes (P) ltd., Sahibabad (hereinafter referred to as the SEPL) by declaring the same as branded goods. The Director to SEPL and SEPL have common director and related person under Section 4 of the Central Excise Act, 1944. It was also found that the respondent did not include the value of clearance of goods declared as branded goods cleared to related persons to arrive at aggregate value of the clearances for computing eligibility for SSI Exemption under Notifications No.8/2001-CE dated 01.03.2001, and 9/2002-CE dated 01.03.2002 and 9/2003-CE dated 01.03.2003. In these circumstances, it was alleged that the respondent has wrongly ava....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s per Rule 9 read with Rules 8 of the Valuation Rules, 2000. 5. It is admitted that the respondent is not clearing 100% goods to the related person. In that circumstances, the Rule 9 read with Rules 8 are not applicable to the facts of this case as observed by the Ld. Commissioner (A) as under: 4. Discussion and finding. 4.1 I have carefully gone through the notices, noticee's reply and submission made at the time of personal hearing. 4.2 On scrutiny of the record, by Prev. Staff of Central Excise Division Sangrur, of the notice party for the year 2000-2001 to 2004-2005, it was observed that apart from clearing goods toother buyers the notice was supplying goods to M/s Spark Electrodes pvt. Ltd., Sahibad (SEPL). The notice had cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y to aggregate value of clearances mentioned against each of the serial numbers in the said table and not separately for each manufacturer; (vi) the aggregate value of clearance of all excisable goods for home consumption by a manufacture from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees three hundred lakhs in the preceding financial year. 4.4 For the purpose of determining the aggregate value of clearance for home consumption, the following clearance shall not be taken into account, namely: (a) Clearance, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no exci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de circular No.52/52/94-CX dated 01.09.1994 has clarified that the following two conditions should be satisfied for invoking this clause: Brand Name must indicate a connection between branded goods and some person using such brand name. Such connection should be in the course of trade. 4.7 This issue was further clarified vide Board Circular No.71/71/94-CX dated 27.10.1994 in respect of supply of castings bearing some brand name or trade name to manufactures. 4.8 The notice was making clearances of non-alloy steel pipes and tubes at concessional rate of duty by not accounting for the value of clearance of goods cleared as branded goods so as to keep value of their clearances within exemption limit of Rs. 300 lacs. As discussed in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re not applicable Rule 9 read with Rule 8 to the facts of this case. The Ld. Commissioner (A) has rightly dropped the proceedings against the respondent on the issue of under valuation. 7. Further, we find that the Respondent cleared goods to various customers and they have cleared the goods to SEPL and affix their brand name on the pipes. The respondent did not include to claim SSI exemption the pipes cleared to SEPL. The contention of the Revenue is that the respondent was required to include the clearance made SEPL while claiming SSI exemption and they have deliberately not included there clearances simply to keep total sales less than Rs. 300 Lakhs during the impugned period. The Revenue also relied on the CBEC Circular No.71/71/94-CX ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....customer. The framers were aware that the customer may merely use such goods as an input for the goods manufactured by him. Yet clause 4 provides in catagoric terms that the exemption is lost if the goods bear the brand/trade name of another. Clause 4 does not state that the exception is last only in respect of such goods as reach the market. It does not carve out an exception for goods manufactured for captive consumption. The framers meant what they provided. The exemption was to be available only to goods which did not bear a brand/trade name of another. The reason for this is obvious. If use of brand/trade names were to permitted on goods manufactured as per orders of customers or which are to be captively consumed then manufacturers, w....