Embossing Customer Name On Goods Not Amount To 'Branding' If Goods Are Not Sold By Customers: CESTAT Deletes 1% Excise Duty

The two member bench consisting Sulekha Beevi C.S. (Judicial Member) and P.Anjani Kumar (Technical Member) has noted that as long as the goods are not sold by the customers of the appellant/assessee in the brand name which they are manufactured, the same cannot be held bearing brand name making them dutiable.

The appellants were the manufacturers of gold jewellery and gold coins falling under Chapter 7113 and 7114 of Central Excise Tariff Act, 1985. The appellant manufactured and supplied gold coins to be distributed by the Government of Tamil Nadu under some welfare scheme undertaken by the Government and also to M/s. Chettinad Cement Corporation Pvt. Ltd., for distribution to their employees.

The department opined that the appellant manufactured gold coins bearing a brand name of others and thus gold manufactured by them attract 1% duty in terms of Notification No.12/2012-CE dated 17.03.2012 as per Sl. No. 200.

A Show cause notice (SCN) was issued to the appellant and was confirmed by the impugned order, wherein the Commissioner has confirmed the duty and appropriated the amount paid towards duty and interest and imposed equal penalty under Section 11 AC of the Central Excise Act, 1944.

Counsel for the appellant submitted that the adjudicating authority has not appreciated the purported Notification No. 12/2012 and a plain reading of the same would indicate that the appellants are entitled for the exemption contained therein; "symbol/marks" in the instant case are not used in relation to a product, for the purpose of indicating or so as to indicate a connection in the course of trade between the product and some person using such name or mark with or without any indication of identity of the person; general information like weight, purity etc., is embossed along with the hologram or symbol to their customers.

It is not the case of the department that the Government of Tamil Nadu nor Chettinad Cement Corporation Pvt. Ltd., are engaged in the business of selling gold coins under the said brand name; no sale whatsoever has been affected by the said customers; it is only for the sake of identification the emblem or hologram or symbol has been utilised. The symbol is only a "house mark" to give identity to the gold coins; there has been no trade /market recognition of the gold coins by way of either "Temple Tower Symbol" inscribed in the coins supplied by the Government of Tamil Nadu or the "Symbol of Chettinad Cements Corporation Pvt. Ltd.," inscribed in the gold coins supplied to them.

Counsel for the appellant further added that embossing of symbols " was merely for the purpose of identification of the manufacturer to the common public in respect of the Government of Tamil Nadu and for the same purpose in respect of gold coins supplied to Chettinad Cements Corporation Pvt. Ltd.

The tribunal found that what the adjudicating authority has lost sight of is the fact that though the appellants have inscribed/embossed the name of the customers as well as Govt. of Tamil Nadu and Chettinad Cements Corporation Pvt. Ltd., it could not be said to be a "brand‟ used in connection of trade and commerce engaged by the person. It is not the case of the department that either of the customers of the appellant is engaged in the trade and gold coins bearing their brand. Therefore, the very concept of branding goods is not appreciated in a legal and proper manner.

Case Title: M/s.Mohanlal Jewellers Pvt. Ltd. Versus Commissioner of GST & Central Excise

Citation: Excise Appeal No. 40502 of 2020

Counsel for Appellant: Advocate Joseph Prabhakar

Counsel for Respondent: Superintendent Arul C. Durairaj

Click Here To Read/Download Order