Purab Printers vs Commissioner Of Central Excise

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No. I

APPEAL No.E/726/11

(Arising out of Order-in-Original No.02-MI/2011 dated 09/02/2011 passed by Commissioner of Central Excise, Mumbai)

For approval and signature:

Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr.S.S.Garg, Member (Judicial)

1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

Purab Printers Appellant Vs. Commissioner of Central Excise, Respondent Mumbai

Appearance: Ms.Anjali Hirawat, Advocate for appellant Shri.Sanjay Haseeja, Supdt. (AR), for respondent

CORAM: Honble Mr. P.S. Pruthi, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)

Date of Hearing : 08/05/2015 Date of Decision : /05/2015

ORDER NO

Per: P.S. Pruthi

1. This appeal is directed against Order-in-Original No.02-MI/2011 dated 09/02/2011 passed by Commissioner of Central Excise, Mumbai, confirming demand of duty of Rs.91,953/- by denial of exemption under Notification No.8/2003-CE dated 01/03/2003, ordering interest under Section 11AB and imposing penalty of Rs.50,000/- under Rule 25 of the Central Excise Rules.

2. The issue in this case is the applicability of exemption under Notification No.8/2003-CE on labels manufactured by the appellant bearing a brand name of their customers. The appellant sought benefit of exemption on SSI clearances under Notification No.8/2003. Initially, the exemption notification did not allow the benefit of small scale exemption to specified goods bearing a brand name or trade name, whether registered or not of another person in terms of para 4 of the notification. Brand name was defined under explanation to clause 5 of the Notification as under.

(A) brand name or trade name means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which 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 that person;

2.1 However, later vide Notification No.24/2009-CE(NT) dated 21/10/2009, Clause (e) under para 4 was inserted in Notification No.8/2003-CE Clause (e). The said Clause (e) reads as follows:

(e) Where the specified goods are in the nature of packing?materials, namely, printed cartons of paper or paper board, metal containers, HDPE woven sacks, adhesive tapes, stickers, PP caps, crown corks, metal labels. The effect of amendment was that the benefit of exemption notification was not deniable to specified goods mentioned in clause e above, even if they bore a brand name of another person.

3. The contention of the learned Counsel is that what they manufactured was stickers which are eligible for exemption as per clause (e) above. Samples of such stickers were enclosed with the appeal and also shown to the bench. The learned Counsel also refers to the Trade notice No.83/87 dated 09/11/1987, which deals with a similar situation. It states;

The name/logo printed on the metal labels etc. is a brand name/trade name in respect of goods on which such labels are to be affixed, because such name/logo indicate a connection in the course of trade between the goods on which such labels are affixed and the brand name owner. Names printed on such metal labels are not brand name by themselves and as long as these metal labels are not affixed on the goods in the trade of which the name/logo printed on such metal labels, etc. serves as brand name (within the definition of explanation vii) they are not hit by the mischief of the amending notification..

3.1 The learned Counsel showed an affidavit submitted to the Commissioner stating that they were manufacturing and supplying self adhesive labels/stickers and there is no clearance of labels/stickers which are not gummed. A confirmation from buyers was also shown stating that the buyers received self adhesive labels/stickers as per purchase orders and as per drawings.

4. On the other hand, the learned AR strongly opposed the presentation of evidence of the product at this stage when no such labels were shown to the Commissioner in adjudication proceedings. He referred to the order-in-original which observed that the invoice under which the goods were supplied showed the description as printed labels which are classifiable under tariff item No.48211020 under specific description meant only for labels. Therefore, the labels cannot be construed as stickers which only are covered by Clause 4 (e) in the notification. He also contended that the affidavit does not indicate any proof of receipt by the Commissioner.

5. We have carefully gone through the facts of the case and the submissions made by both sides.

5.1 To us it is clear that the intention of the Government is to grant the benefit of SSI exemption to goods, namely, packing material, containers, metal labels, etc. which may carry a brand name of the customer. The stated policy is clearly not to consider these labels manufactured by one person themselves as having any connection in the course of trade with the goods manufactured by the Customer for whom labels are made. The labels are made for customers who put them on the containers of goods manufactured by them (customers). Board Circular No.71/71/94-CX dated 27/10/1984 issued in the context of SSI Notification No.1/93-CE supports this view. It states;

Coming to the first illustration, castings are manufactured as per the specific requirement of the customers and the brand name which the small scale unit puts on such casting is meant for use of the customer only for further manufacture. Casting having such band name are not sold in the market as castings as such, because it will be of no use to another person. It is felt that when such castings are not traded but only sold to a particular manufacturer for his own use, the embossing of the brand name of the customer on the castings would not amount to using brand name so as to deny the benefit of Notification No.1/93. Of course it is found that such branded casting are traded in the market as such, it will amount to use of such casting in the course of trade and the benefit of exemption notification will not be available. In other words, so long as the branded castings are being supplied to the customer for further manufacture, and are not otherwise traded, the benefit of small scale exemption in such cases should not be denied merely on the ground that it contains brand name of another unit. Whether such supply is in the course of trade or not, of course, will be a matter of fact and has to be ascertained from the nature of transaction between the small scale unit and the brand name owner. So long as they are made to order as per the design and specification of a particular manufacturer and sold to that manufacturer for his own use, the benefit of notification No.1/93 cannot be denied.

We cannot agree with the learned AR that the Circular does not apply to the facts of the present case.

5.2 It is clear from the description of goods in Clause (e) that all kinds of labels, stickers would get covered. We note the Oxford dictionary meaning of stickers shown by the learned Counsel which describes a sticker as an adhesive label or notice. Even in the absence of a dictionary meaning we find no reason not to consider a label as sticker especially in view of the fact that the metal labels are also mentioned in Clause 4 (e). An interpretation of Clause 4 (e) to the effect that stickers would mean only gummed labels is not borne by sound reasoning. We do not appreciate the thin line of distinction being at tempted by Revenue to differentiate between the stickers and labels. We do not think it necessary to go into the aspect of the affidavit or the dispute regarding presentation of labels before the adjudicating authority. Accordingly, we hold that the labels manufactured by the appellant are eligible for exemption in terms of notification No.08/2003-CE as amended by Notification No.47/2007. Consequently, the question of penalty does not arise.

6. The impugned order is set aside and the appeal is allowed.

(Pronounced in Court on )

(S.S. Garg) Member (Judicial) (P.S. Pruthi) Member (Technical)

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