Mark Engraved On Gold Coins Is House Mark And Not Brand Name, No Excise Duty Payable: Chennai CESTAT

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that excise duty is not payable on the mark engraved on gold coins as it is just a house mark and not a brand name.

The bench of Sulekha Beevi C. S. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that a mark intended for identifying the manufacturer cannot be considered to be a brand name as it is only a house mark.

The appellant/assessee is engaged in the manufacture and clearance of gold jewellery, diamond-studded gold jewellery, silver jewellery (falling under Chapter Subheading 7113 of the Central Excise Tariff Act, 1985), and gold coins of 916 purity (falling under Chapter Subheading 7114 of the CETA, 1985). They are registered with the Central Excise Department.

The 22-carat gold coins are manufactured by the assessee through their job workers with the house marks 'AVRorAVRJ' engraved on them. It is done for the purpose of identifying the appellant as the manufacturer of said gold coins. The gold coins manufactured by the appellant are eligible for excise duty exemption.

The show cause notice was issued proposing the demand of Central Excise Duty under Section 11A(4) of the Central Excise Act, 1944, along with interest under Section 11AA and penalty under Section 11AC of the Excise Act. The Order has confirmed the demand for 1% excise duty on gold coins manufactured by the Appellant under Sl. No. 200(I) of Notification No. 12/2012-CE, inter alia, on the ground that the coins manufactured by the Appellant are branded.

The assessee contended that Explanation to Sl. No. 200 of the Notification defines 'brand name' and specifies that an identity put by a jeweller or the job worker, commonly known as 'house mark', shall not be considered a brand name. Therefore, gold coins bearing 'house mark' such as 'AVR/AVRJ', sold by the appellant, are liable for the NIL rate of duty prescribed under Sl. No. 192 of the said notification.

The department contended that the engraving made by the appellant on the gold coin is in the nature of a brand name.

The tribunal noted that, in the order, brand name and trade name are used interchangeably by the department. A house mark is something that is used to describe and identify a company. A brand name, also called a product mark, is used by a company to identify the product. A brand name is more like a title that a company or manufacturer gives to the product. It evokes positive thoughts and sentiments in the customer or client. A brand name is a mixed basket of personality, culture, identity, image, reputation, and spirit of a company. It often represents the style, appearance, and quality of the product. A brand name helps a company to set apart its products from competing products. Although a 'brand' may have some indication of the company or manufacturer, it is used to create an image for the product. A house mark, as already stated, is used for the identity of a company or manufacturer.

The tribunal held that the mark on the gold coins only indicates the manufacturer or seller of the coins. The mark engraved on the gold coins is only a house mark and not a brand name or trade name. The demand of duty alleging that the gold coins bear a brand name cannot be sustained and requires them to be set aside.

Counsel For Appellant: Raghavan Ramabadran

Counsel For Respondent: N. Sathyanarayanan

Case Title: M/s.AVR Swarnamahal Jewelry Limited Versus The Commissioner of CGST & Central Excise

Case No.: Excise Appeal No.40359 of 2022

Click Here To Read The Order