TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 549
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....dt. 28.06.2016 2003-04 to 05-06 2. We are taking the facts of the appeals from Excise Appeal No.71001 of 2016. 3. The Respondents are manufacturer of Ophthalmic and Liquid Orals falling under Chapter heading 300310. They are registered with Central Excise Department and availing SSI Exemption under Notification No.8/2003-CE dated 01.03.2003. They are having their manufacturing unit at MNIT Industrial Estate Allahabad and also branch office as well as godown at Mumfordganj Allahabad. 4. The Respondents were also getting their goods manufactured on Principal-to-Principal basis from other manufacturers such as M/s Dolphin Laboratories Ltd., M/s Alchon Parentals (India) Ltd., situated at different places. They were also getting their goods manufactured on Loan License Basis from the units such as M/s Core Healthcare Ltd. situated at Ahmedabad and providing all the raw materials as well as packing material to them. The Respondents are also having a branch office/depot at Ahmedabad. Total quantity of the goods manufactured on Loan License Basis is taken to their depot at Ahmedabad and then transferred to Allahabad branch office. The total goods manufactured on Principal-to-Principal ....
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....The Respondents M/s Optho Remedies Pvt. Ltd. submitted that the turnover of the Respondents is not to be clubbed as the Respondents and the other companies are independent and clearing their products after payment of Central Excise duty, they are doing trading of the products manufactured on Principal-to-Principal basis and on Loan License Basis. It was submitted that the revenue has relied upon Stay Order No.159165/2013 dated 11.09.2013 and interim Order No.339/2013 dated 13.05.2013 passed in Excise Appeal No.1061/20125 - Ex. (DB) [2014 (312) E.L.T. 127 (Tri.-Del.)] in their own case, which was not a final order. 10. The Respondents relied upon the judgement of Hon'ble Supreme Court in the case of CCE vs. Cosme Farma Laboratories Ltd. [2015 (318) E.L.T. 545 (SC)] which is on identical issue and dismissed the appeal filed by the revenue. In this case the Hon'ble Supreme Court observed as under:- "21. The learned Counsel appearing for the respondent had also drawn our attention to a copy of one of the agreements entered into between the respondent and the job workers. Upon going through the said agreement, we find that the said agreement shows that the job workers were not assign....
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....to sell such goods. 13. We do not agree with the grounds taken by the revenue. In the case of CCE Goa vs. Cosme Farma Laboratories Ltd.(supra), the Hon'ble Supreme Court dealt with identical issue and dismissed the appeal filed by the Department. It is held that the job workers were manufacturers and the Respondents - the Loan Licensee was not the manufacturer. 14. We agree with the finding of the Adjudicating Authority and submissions made by the Respondents and dismiss the Excise Appeal No.71001/2016. We allow Excise Appeal No.1061/2012 and Excise Appeal No.1394/2012 filed by the assessee and set aside the Order passed by Commissioner (Appeals). (Order pronounced in open court on.............) -SEPARATE ORDER- PER : SANJIV SRIVASTAVA MEMBER (TECHNICAL): I have gone through the order prepared by Learned Member (Judicial). However, even after long hours of persuasion, I am not in position to agree with the findings recorded. 2.0 The issue involve in the present case is vis-à-vis the determination of value of clearances by the manufacturing unit for determining its eligibility to exemption under Notification No.8/2003-CE dated 01.03.2003. Appellants are engage....
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....ers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer] and the word "manufacturer" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account;" 5.0 In the present case the goods are those goods which are got manufactured by the appellants on job work basis or on loan license basis and actually products marked to the consumers only after undertaking whatsoever treatment to the customer from the premises of the appellants, that being so for the purpose of Rule 2f the process undertaken would have been the premises of manufacturer and the value of clearances should have been determined after taking into account the value of these goods also. 6.0 Notification No.8/2003-CE dated 01.03.2003 provides as under:- "2. The exemption contained in this notification shall apply subject to the following conditions, namely : - (i) a manufacturer has the option not to avail the exemption contained in this no....
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....er 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. For the purposes of determining the 3. aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely : - clearances bearing the brand name or (a) trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4; clearances of the specified goods which (b) are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods; clearances of strips of plastics used (c) within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene. The exemption contained in this 4. notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases :- where the specified goods, being in the (a) nature of components or parts of any machinery or equipment or appliances, are cleared for use as original equipment in the manufacture of ....
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....f value fixed under section 3 of the said Act;" 7.0 The clauses as referred above are identical to clauses in Notification No.175/86 and 1/1993 specifically clause 4, which has been interpreted by Hon'ble Supreme Court in the case of KOHINOOR ELASTICS PVT. LTD. Vs COMMISSIONER OF CENTRAL EXCISE, INDORE 2005 (188) ELT 3 (SC), wherein following has been held:- "7.It is on just such a reasoning that the Full Bench of the Tribunal has held that the exemption is not lost. We are afraid that there is complete misreading and a misunderstanding of the Notification. As set out hereinabove, Clause 4 of the Notification is clear and unambiguous. It says that the exemption is lost if the "goods" bear the brand/trade name of another. There are no other qualifying words. The term "goods" admittedly refers to "goods" which are otherwise excisable except for the exemption granted by the Notification. In this case admittedly "goods" are the elastic manufactured by the Appellants. As stated above Clause 4 does not provide that exemption is lost only for "goods (elastic)" which are sold in the market or on those "goods (elastic)" which reach customers without any change in form. Clause 4 does not....
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....rom the fact that the elastics on which brand/trade name of "A" is affixed will not and cannot be used by any person other than the person using that brand/trade name. As set out hereinabove once a brand/trade name is used in the course of trade of the manufacturer, who is indicating a connection between the "goods" manufactured by him and the person using the brand/trade name, the exemption is lost. In any case it cannot be forgotten that the customer wants his brand/trade name affixed on the product not for his own knowledge or interest. The elastic supplied by the Appellants is becoming part and parcel of the undergarment. The customer is getting the brand/trade name affixed because he wants the ultimate customer to know that there is a connection between the product and him. Of course the intention of the customer is not relevant for the purposes of this Notification. This is being mentioned only to indicate that interpretation sought to be placed by Mr. Sridharan would enable manufacturers, who are otherwise not eligible, to get manufactured from small scale industries like the Appellants their "goods" or some inputs, affix their brand/trade name and still avail of exemption. ....
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....nother person, using such name or mark, then the assessee would not be entitled to the benefit of exemption notification. We may hasten to clarify that if the assessee is able to satisfy the Adjudicating Authority that there was no such intention, or that the user of the brand name was entirely fortuitous, it would be entitled to the benefit of the exemption." 9.0 Tribunal in the case of SANTEL COMMUNICATIONS PVT. LTD. Vs COMMR. OF C. EX., CHENNAI-IV 2016 (343) ELT 1026 has held as follows: "24. On perusal of records and findings, we find that the adjudicating authority dealt the issue in detail at Para 14 of the order and relied the Board's Circular dated 27-10-2014 and the Apex Court's decision in the case of Collector v. Vimal Printery [Civil Appeal No. D. No. 8814/99] reported in 2000 (115) E.L.T. A222 (S.C.). It is seen that the assessee supplied the Basic wired telephones to the "TATA INDICOM" who is only a Telecom service provider and not engaged in manufacture of any excisable goods with Brand name and not registered under Central Excise. The telephone sets supplied by the appellant are not traded or sold to customers but are only rented to the customers while giving te....
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.... RUBBER PRODUCTS P. LTD. Vs COMMISSIONER OF C. EX., MUMBAI-III 2015 (318) ELT 578 (SC) Hon'ble Supreme Court has held as follows:- " 5.From the aforesaid definition of brand name, it becomes apparent that on the goods manufactured by the appellant for the aforesaid automobile companies, the appellant had been using brand name or trade name on those goods. In such cases, in respect of those goods which are manufactured for the other person, obviously no exemption is to be given as the aforesaid Notification does not apply to those specified goods. To put it pithily, what would be the position if the appellant was doing job work only for other companies and using their brand name on the goods manufactured? Was it permissible to seek exemption of notification in such circumstances? This issue has been considered time and again by this court in number of judgments. 6.In a recent judgment dated 11-3-2015 pronounced by this very Bench in the case of 'Commissioner of Central Excise, Jamshedpur v. M/s. Tubes & Structurals and Another‟ [Civil Appeal Nos. 7955-7956 of 2003], after taking note of two earlier judgments of this court, the issue was dealt with as under : - "This is....
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.... or brand name by the SSI unit was immaterial. That was the purpose for substituting the word "affixing" by the word "bearing". Going by the aforesaid consideration this Court held in Australian Foods (India) (P) Ltd. case that after this amendment in para 4 it was not necessary that there has to be affixation of the name or mark on the goods. Applying the ratio of this case to the facts of the present case, the irresistible conclusion is to hold that the impugned order of the CEGAT is untenable and not in accordance with law. We may mention that while giving its decision the CEGAT has gone by the unamended para 4 without taking into consideration the amended para and the implication thereof." 7.Once we come to the conclusion that in respect of those goods where brand name of other party is used on manufactured goods and that other party is not a SSI unit, exemption is not available, it would lead to inevitable result that the value of such goods cannot be added as well, while considering the value of the goods cleared by the assessee in the previous year. 8.We, however, find that the CEGAT has given two other reasons to deny the relief to the appellant. In its order it ha....
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....ly misdirected itself. The term "brand name or trade name" is qualified by the words "that is to say". Thus, even though under normal circumstances a brand name or a trade name may have the meaning as suggested by the Tribunal, for the purposes of such a Notification the terms "brand name or trade name" get qualified by the words which follow. The words which follow are "a name or a mark". Thus even an ordinary name or an ordinary mark is sufficient. It is then elaborated that the "name or mark" such as a "symbol" or a "monogram" or a "label" or even a "signature of invented word" is a brand name or trade name. However, the contention is that they must be used in relation to the product and for the purposes of indicating a connection with the other person. This is further made clear by the words "any writing". 10.The upshoot of the aforesaid discussion would be to hold that value of the goods meant for "HM", "PAL", "KH", etc. could not have been included while considering as to whether the appellant is entitled to the benefit of the aforesaid Notification or not. Once that is excluded and the case is confined to the brand name 'VIR‟ which is the appellant's own brand name ....
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....e Act and the rules made there under, I am not in position to agree with the said decision of Hon'ble Supreme Court in the case of M/s Cosme Farma Laboratories Ltd. (supra), which is for the period when these provisions were not there. 12.0 In the present case the total value of clearances of the goods manufactured by the appellant-I, either in his own premises or on loan license basis or on job work basis should be taken into account for determining the correct value of clearances. This correct value of clearances would be the total of clearances made from the appellant's manufacturing depot/office premises. That being so the impugned order cannot be faulted with. 13.0 In the case of M/s P & B Pharmaceuticals (P) Ltd. Vs Collector of Central Excise 2003 (153) ELT 14 (SC) relied upon by Commissioner (Appeals) in his order, wherein Hon'ble Supreme Court has held as follows:- "15.The second question relates to availing of exemption after the insertion of para 7 in Notification No. 175/86-C.E., dated March 1, 1986. Para 7 reads as follows : The "7. exemption contained in this notification shall not apply to the specified goods where a manufacturer affixes the specified goods wi....
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....he appellants should be- A. allowed as held by Member (Judicial) relying on the decision of Cosme Farma and the appeal filed by the revenue dismissed ; or B. dismissed as held by Member (Technical) as the decision of Cosme Farma is distinguishable for the reason of change in the provision of the statute, and on the basis of the provisions of statute and decisions relied upon by him and the appeal filed by the revenue be allowed. (Order pronounced in open court on- 14th November, 2024) Sd/- (P.K. CHOUDHARY) MEMBER (JUDICIAL) Sd/- (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) &nbs....
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....ferred to Allahabad branch office. The goods manufactured by the assessee at their factory, are not brought to the branch office but cleared on payment of duty directly to the customers. 2.2 After scrutiny of ER-1 Returns and Profit & Loss Account for the period in dispute, the Revenue entertained the view that the assessee had made the goods cleared clandestinely and availed SSI Exemption under Notification No. 8/2003-CE dated 01.03.2003 wrongly. On these allegations, show cause notices for different periods (as detailed in the Interim Order) were issued to the assessee demanding duty with the allegations that the assesseee clandestinely cleared the goods under valuation and not entitled to SSI Exemption. The Revenue is also of the view that turnover of the units manufacturing on loan-license basis, are to be taken as manufactured by the assessee. 2.3 In Appeal Nos. E/1061/2012 & E/1394/2012, the Adjudicating Authority confirmed the demand and imposed the penalties; however, in Appeal No. E/71001/2016, dropped the demand by agreeing with the submissions of the assessee. Aggrieved by dropping the demand, the Revenue came in appeal before the Tribunal and after hearing both the pa....
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....d also manufacturers on principal-to-principal basis cannot be clubbed with the turnover of the assessee thereby denying the SSI benefit. 4.4 The learned Counsel further submitted that it is the case of the department that the assessee are not eligible for SSI Exemption under Notification No. 8/2003-CE being brand name of the assesssee is used by the other manufacturers; the said notification states that clearances bearing the brand name or trade name of another person and there is no dispute that the assessee are using their own brand name and not of any other person. It is also the case of the department that the manufacturers under loan-license as well as principal-toprincipal basis are using the brand name of the assessee-M/s Optho Remedies Pvt Ltd. In fact, the department should have denied SSI benefit to the manufacturers who are using the brand name of the assessee. 4.5 The learned Counsel further submitted that the Member (Technical) has relied upon the various decisions of Tribunal, High Courts and Supreme Court but all those cases are on the footing that SSI benefit will not be available if any manufacturer clears the goods bearing the brand name or trade name of anothe....
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....oods by using brand name of other manufacturer; but in the present case, the assessee is manufacturing the goods by using its own brand name and those are the other manufacturers-job workers, who are manufacturing the goods by using the brand name of the assessee-M/s Optho Remedies Pvt Ltd. The department cannot deny the SSI Exemption to the assessee rather it should be denied to the manufacturers-job workers who are using the brand name of the assessee. In this regard, I may refer to clause (4) of the Notification No. 8/2003-CE dated 01.03.2003, which is reproduced herein below: "4. The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases:- (a) where the specified goods, being in the nature of components or parts of any machinery or equipment or appliances, are cleared for use as original equipment in the manufacture of the said machinery or equipment or appliances by following the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001: Provided that manufacture....
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....factured by the assessee on their own account, for the purpose of exemption under notifications as held in the following decisions: ⮚ Omega Pharmaceuticals vs. CCE, Surat - 2006 (196) ELT 332 (Tri. Mumbai) ⮚ Tanmed Pharmaceuticals vs. CCE, Chennai-IV - 2005 (190) ELT 190 (Tri. Chennai) ⮚ CCE, Chennai-II vs. Medopharm - 2004 (175) ELT 754 (Tri. Chennai) ⮚ Group Pharmaceuticals P Ltd vs. CCE, Bombay - 1996 (84) ELT 440 (Tribunal) 12. Further, I find that in the case of Cosme Remedies Ltd vs. CCE, Goa - 2006 (203) ELT 567 (Tri. Mumbai) decided by the Tribunal, there was a difference of opinions between the Members, and by a majority view, it was held by the Tribunal that the principal manufacturer would be the job worker who has manufactured the goods on loan-license basis and not the assesse who is getting the goods manufactured from the job worker. Not satisfied with the majority order of the Tribunal, the Revenue filed the appeal before the Hon'ble Apex Court, reported CCE, Goa vs. Cosme Farma Laboratories - 2015 (318) ELT 545 (SC) and the Hon'ble Apex Court, after examining all the facts of the case and agreements between the parties, has uphel....