KOHINOOR ELASTICS PVT. LTD. Vs. CCE, INDORE

JUDGEMENT

(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: -

(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.