Customs, Excise and Gold Tribunal - Delhi
M/S Kohinoor Elastics Pvt. Ltd. vs Cce, Indore on 21 June, 2001
ORDER
V.K. Agrawal
1. This is an application filed by M/s Kohinoor Elastics Pvt. Ltd. praying for waiver of pre-deposit of Central Excise duty amounting to Rs. 11,03,091/- and penalty Rs. 1,50,000/-.
2. Sh. V.L. Kumaran, ld. advocate, submitted that the applicants manufacture narrow woven fabrics (tapes) which are supplied by them in their entirety to the garment manufacturers to use them as an input for the manufacture of the garments; that no part of the tapes manufactured by them is sold to anybody else except the respective garment manufacturers; that the department has denied them the benefit of SSI exemption Notification NO. 1/93-CE on the ground that the tapes bear the brand name of another person. The ld. advocate, further, mentioned that the Commissioner (Appeals) has relied upon the decision of the Appellate Tribunal in their own case wherein the benefit of the notification was denied to them vide Final Order No. 1056/99-D dated 24.12.99. The ld. counsel mentioned that in order to attract mischief of para 4 of notification 1/94, the goods bearing the brand name has to show a connection in the course of trade between the goods and such person who is the owner of the brand name; that the trading of goods bearing the brand name by the manufacturer in the market is a pre-condition for invoking para 4 of the notification; that as in the present matter all the tapes are supplied only to the respective garment manufacturer the mischief to para 4 of the notification is not invocable as there is no trading of the branded goods. In this regard, he referred to the Boards' Circular No. 71/71/94-CX dated 27.10.94 where it was clarified that if there is no trade of branded goods, the brand name provision would not apply. He further mentioned that applying the aforesaid circular, the Larger Bench of the Tribunal in the case of Prakash Industries Vs. CCE [2000 (119) ELT 30] held that exemption under Notification No. 175/86 cannot be denied in respect of the HDPE sacks which were affixed with the brand name of the customer - M/s Orissa Cement Ltd. Finally, he mentioned that the Appellate Tribunal has taken the similar views in the following cases:-
(i) S.A. Industries Vs. CCE, Mumbai [2000 (121) ELT 393 (T)].
(ii) CCE Vs. Vitashiv Ceramics Ltd. [2000 (122) ELT 106 (T)]
3. Opposing the prayers Sh. R.C. Sankhla, ld. DR, submitted that the Tribunal in the case of the applicants themselves has denied them the benefit of Notification No. 1/93 and accordingly, they should be directed to deposit the entire amount of duty confirmed against them.
4. We have considered the submissions of both the sides. A question whether the benefit of Notification No. 1/93 is available to the applicants in respect of tapes manufactured by them and which bear the brand name of another person will be decided only after hearing both the sides in detail and after considering the various decisions on the subject. The ld. advocate for the applicants has relied upon decision of the Larger Bench of the Tribunal and the Revenue, on the other hand, has relied upon Tribunal's earlier decision on the same issue in respect of the applicants themselves. In view of these circumstances, we are of the view that interest of justice will be met if the applicants are directed to deposit only R. 5.5 lakhs within six weeks. On complying with this direction there will be waiver of pre-deposit of the remaining amount of duty and the entire amount of penalty and the recovery of the same will remain stayed during the pendency of the appeal. The matter will come up for reporting compliance on 27.8.2001. At this state, the ld. advocate requested for hearing the appeal itself on 27.8.2001, subject to complying with the requirement of pre-deposit as ordered. The ld. DR has no objection. Accordingly, we post there matter for regular hearing on 27.8.2001 subject to compliance with the direction of pre-deposit under Section 35F of the Central Excise Act.