Customs, Excise and Gold Tribunal - Calcutta
Cce vs Mehra Traders on 12 February, 2004
Equivalent citations: 2004(95)ECC28, 2004(172)ELT195(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. Being aggrieved with the order passed by the Commissioner of Central Excise (Appeals), Revenue has filed the present appeal.
2. The respondents are engaged in the manufacture of 'Narrow Woven Fabrics-Elastic Tapes' classifiable under heading 5806.20 of Central Excise Tariff Act, 1985 under the brand name of their buyers. The buyers used the said Elastic Tapes for the manufacture of Jangia under their brand name. The dispute is as to whether the respondents are entitled to claim the benefit of small scale exemption Notification. As per the Revenue, since they used the brand name of their buyers, they are not entitled the benefit of small scale exemption. On the other hand,the Commissioner has gone by the fact that such buyers further used the Elastic Tapes for the manufacture of Jangia under their brand name and the goods are not being traded in the open market. As such, following the Board's Circular No. 71/71/94-CX dated 27.10.94 and the other decision of the Tribunal, he has held in favour of the respondents.
3. We have heard Shri T.K. Kar, ld. SDR and Shri D.K. Sarkar, ld. Consultant
4. The Commissioner (Appeals) in his impugned order has held as under :-
" 6. I find that the appellant submitted declaration as per provision of Rule 173B claiming S.S.I exemption on the basis of the clarification given by the Board vide Circular No.71/71/94-CX dated 27.10.94 for their manufactured product "Branded Narrow Woven Elastic Tapes". The show cause notice was issued denying S.S.I exemption benefit on the basis of CBEC Circular No.50/50/94-CX dated 19.8.94 as corrected by the Circular No. 66/66/94-CX dated 10.10.94. I find that the appellant manufactured the said item with brand name as per direction and specification of the buyer who owned the brand name. The goods were sold exclusively to that buyer who in turn used the same in manufacture of their final product namely Jangia. There was no trading of the subject goods in the open market. the appellant also submitted certificates from their buyers in support of their claim. The clarification given by the CBEC in this respect vide Circular No. 71/71/94-CX is very clear. If the branded goods are not traded in the open market and the same are fully consumed by the owner of the brand name for their own used or in the manufacture of different goods then the provision of brand name cannot applied for denial of S.S.I exemption. In the case laws referred to by the appellant, Hon'ble CEGAT held the same view. The Adjudicating Authority held that CBEC's clarification in the Circular No. 71/71/94-CX is not applicable in this case as the appellant did not submit any evidence in support of their claim. But I find that when the appellant submitted declaration under Rule 173B claiming exemption on the basis of above mentioned Circular, concerned Asstt. Commissioner never made any inquiry nor asked the appellant to submit evidence in support of their claim as provided in Rule 173B(3). Hence denial of exemption benefit for want of evidence has no ground. On the other hand, Department issued show-cause notice alleging that the appellant was not eligible for S.S.I exemptions per clarification given in CBEC Circular No. 50/50/94-CS as corrected by Circular No. 64/64/94-CX without providing any evidence in support of the allegation. It is the responsibility of the department to submit evidence in support of its claim while issuing show cause notice. There is no evidence on record that the appellant traded their branded goods in course of trade to indicate a connection between said goods and the owner of the brand name. Hence the clarification given by CBEC in the Circular No.50/50/94-CX is not applicable in this case. I also find that when the Additional Commissioner denied the S.S.I exemption benefit for the said branded goods the Commissioner vide his Order No. CCE/Kol-I/26/2002 dated 18.4.2002 allowed S.S.I exemption for the same branded goods for the later period . While passing the order the Commissioner of Central Excise, Kol.I, I held :
' It is therefore clear that the impugned goods are made to order as per design and specification of a particular manufacturer of Hosiery goods and sold to that manufacturer for their own use in the manufacture of a completely different item. In the decision reported in 1999 (106) ELT 184 (Tri.) Hon'ble CEGAT held that manufacturers of branded Gurd Plates of Fans having brand name are eligible for S.S.I exemption as these are exclusively used by Electric Fan manufacturer'.
Going by the ration of the above judgements and from the records it can be concluded that there is no connection with the branded goods (i.e. elastic tapes) with the person using the same in the course of trade and as such brand name provision is not applicable for the purpose of denying S.S.I exemption. I do not find any reason to disagree with the finding of my ld. colleague."
5. As against the above observations made by the Appellate Authority, the Revenue in their memo of appeal has not produced any evidence to show that the goods are being traded by the Respondents in the open market. It is seen that their. buyers had placed on record an affidavit showing that Elastic Tapes are being consumed by them for further manufacture of their final product carrying their brand name. It is also seen that the Commissioner of Central Excise has dropped the proceedings for the subsequent period against the respondents. There is nothing in the Revenue's appeal to show that the said order of the Commissioner has not been accepted by the Revenue and has been appealed against. In the circumstances, we do not find any justification to interfere in the order of the Commissioner. Accordingly, the Revenue's appeal is rejected.