Customs, Excise and Gold Tribunal - Mumbai
Esprit Switchgear Pvt. Ltd. vs Cce on 1 June, 1998
Equivalent citations: 1998(77)ECR703(TRI.-MUMBAI)
ORDER
K.S. Venkataramani, Vice-President
1. The application is for dispensing with the pre-deposit of Rs. 18,57,164/- as duty and Rs. 15,00,000/- as penalty under Rule 173Q of the Central Excise Rules.
2. Shri M.H. Patil Earned Counsel appearing along with Shri Arun Mehta, Earned Counsel for the applicant submitted that the demand in this case is on the clearance of Miniature Circuit Breakers (MCB) manufactured by the applicant who is a small scale industrial unit availing of exemption under 175/86. The Commissioner in the impugned order has denied the exemption on the MCB for the reason that these goods were bearing the brand name of the German Collaborator of the applicant and therefore the exemption cannot be extended to them in view of the provision of para 4 of the Notification 175/86, which says that where the specified goods are affixed with the brand name of a person who is not eligible for the exemption, the Notification will not apply. The Earned Counsel submitted that their goods did not bear the brand name of their foreign collaborator. On the other hand the goods bore their own brand name "SAFE LINE" and indicated manufactured in technical collaboration with F&G, West Germany. In such a circumstance as per the Tribunal decision in the case of Weigand India (P) Ltd. v. Collector ; an indication that the goods are manufactured in technical collaboration with foreign collaborator will not amount to affixing of the brand name. The Earned Counsel also assailed the order on the basis of the limitation because the applicant have submitted classification list indicating therein the use of their brand name. It was further pleaded by the Earned Counsel that the demand actually has been wrongly computed. The adjudication order has a finding in their favour on the classification of the goods and therefore the demand relating to the denial of exemption as a result of para 4 thereof would only apply; amounting to Rs. 7 lakhs.
3. Shri S.V. Singh, Ld. DR opposed the stay and pointed out that there was time when the applicant had indicated that the goods were manufactured in technical collaboration of the German Collaboration along with the brand name and logo of the German collaborator on the goods. It was only subsequently that they discontinued using the...indicated that manufactured in technical collaboration with F&G which is nothing but indirect way of indicating the brand name logo of the collaborator. The Ld. DR also point out that in this aspect the case differs from the case law cited by the Learned Counsel.
4. We have carefully considered these submissions. We find that the question is largely arguable on the interpretation of the rationale behind incorporating para 4 in the Notification 175/86 barring exemption in that Notification to products which bore the brand name of another person who is not entitled to the exemption. We note that, this aspect of the purpose behind the incorporation of para 4 of the Notification has been dealt with by Supreme Court in its Judgment in the case of Union of India v. Paliwal Elcctricals (P) Ltd. . The Supreme Court held that "the exemption is designed to enable the small manufacturer to survive-in the market in the competition with the ineligible manufacturer, but if he joins and identifies himself with the ineligible manufacturer, his goods become one with the goods of such ineligible manufacturer. They become indistinguishable. In the market, they will all be understood as one and the same goods. They no longer need the benefits under the Notification".
5. In these circumstances the issue is arguable and hence, for the purpose of hearing the appeal on merits we direct that the applicant should deposit a sum of Rs. 2 lakhs on or before 30th June, 1998 subject to which pre-deposit of balance amount of duty and penalty is dispensed with and recovery stayed. The matter will come up for ascertaining compliance on 4th July, 1998.
(Dictated in Court)