SUPERCOAT INDUSTRIES Vs. CCE

JUDGEMENT

(1.) M /s. Supercoat Industries manufactured and cleared paints in cartons. They affixed the brand name "SHEENLAC'' on two sides of the cartons and their own product name as well as their address on the cartons. "SHEENLAC" brand did not belong to M/s. Supercoat Industries. As the SSI Notifications No. 1/93 and No. 16/97 did not allow the exemption contained therein if the brand name of another person was affixed on the goods, after due process of law, the original authority demanded duty of Rs. 5.05 lakhs from M/s. Supercoat Industries for the financial year 1997 -98 for clearances effected from February'97. In determining the period of clearances using the brand name "Sheenlac" on the cartons, the original authority had relied on the statements recorded from the suppliers of cartons. In the impugned order, the Commissioner (Appeals) affirmed the order of the original authority. The original authority had also imposed equal amount of penalty under Section 11AC and had demanded interest due on the duty not paid. In the appeal before us and during hearing, the appellants have submitted that they were under the bona fide belief that the impugned clearances were eligible for the SSI exemption even though the cartons had carried the brand name of the product and also the brand name of another person. In support of their plea that in the circumstances, larger period could not be invoked, the Ld. Counsel relied on the decision of the Tribunal in CCE, Mumbai -II v. AAREM Enterprises reported in . In the said decision, the Tribunal had held that when the cartons bore the brand name of the manufacturer and the brand name of another person, the chances of the manufacturer entertaining bona fide belief that he was eligible for SSI benefit could not be ruled out. Therefore, larger period was not invokable.

(2.) THE main argument of the appellants is that as per para -4 of the Notification No. 16/97 the SSI benefit is not admissible to specified goods carrying brand name of another person on the goods. In the instant case, the excisable goods are paints. Brand name cannot be affixed on paints. Therefore, the prohibition can be applied only in relation to the primary packing namely the tin containing paint. The restriction cannot be applied if the brand name of another person appeared on the cartons containing several tins of paint. In this regard the Ld. Counsel relied on the decision of the Tribunal in Picasso Home Products v. CCE, Daman . In the said decision, the facts were that the goods and the primary packing had appellant's brand name. The brand name of another person was affixed on the secondary packing. The Tribunal held that when the mark impugned was at some place which was not under or encompassed under the levy, then such marks have to be ignored for the purpose of the Central Excise law, and the Notification. The Ld. Counsel submitted that the invoices raised by the assessee's distributors showed the brand name "Sheenlac". However, since the goods themselves did not bear the brand name of another person, the impugned goods were eligible for the SSI exemption denied in the impugned order. In this regard, he relied on the judgment of the Apex Court in the case of CCE Jamshedpur v. Superex Industries reported in, 2004 (174) ELT 4 (S.C.) , wherein the Apex Court observed as follows:

(3.) THE Ld. SDR submits that in cases where the judicial authorities held in favour of the assessee in cases of assessee using another person's brand name on the packing, the goods involved were materials such as bicycles, generators and not a commodity like paints. He reiterated the reasoning followed by the Commissioner.