JUDGMENT
V.K. Agrawal, Member (T)
1. In this appeal, filed by M/s. Shakti Tools & Products, the issue involved is whether the benefit of Small Scale Exemption under Notification No. 1/93-C.E. is available to them w.e.f. 10-10-95.
2. Shri V.R. Sethi, learned Advocate, submitted that the Appellants manufacture plastic T.V. parts and moulds for injection moulding machine which were affixed with brand name of their customers such as Salora. Texla, E.C.I., etc.; that in their classification declaration effective from 1-5-95 they mentioned clearly normal rate of duty as applicable and also mentioned that they are manufacturing branded goods; that in October, 1995, T.V. manufacturers directed them not to put their name/monogram/brand name on the cabinet/other components as branding of the parts was adding to their cost; that accordingly they filed another classification declaration w.e.f. 10-10-95 wherein they claimed the benefit of Notification No. 1/93 claiming concessional rate of duty as per slab rate; that the Asstt. Commissioner under Adjudication Order No. 65/98, dated 30-10-98 disallowed the benefit of the notification, confirmed the demand of duty, and imposed penalty on the ground that at the start of the financial year they had opted to pay duty at tariff rate which were repeated in their declaration effective from 1-5-95 and the change in option is not permissible in view of the provision in Notification No. 1/93; that the Commissioner (Appeals) also under the impugned Order rejected their appeal. Learned Advocate, further, submitted that in view of goods being affixed with brand name of another person they were not eligible for the benefit of Notification No. 1/93 and as such they had paid duties at effective rates; that their classification list clearly mentioned T.V. plastic parts, moulds for injection of moulding machine and waste and scrap; that the relevant clause of Notification No. 1/93 refers to Para 1 of notification and as they were manufacturing branded goods the question of taking any option in respect of Paragraph 1 of the notification did not arise since they had no option because the goods being manufactured were branded goods; that an option can be exercised only when more than one choices are available. In support of his contention he relied upon the decision in the case of CCE, New Delhi v. Products and Ideas – 2002 (140) E.L.T. 232 (Tribunal) = 2001 (47) RLT 286 (CEGAT), wherein it was held that goods which are affixed with brand name are not entitled for SSI exemption and such goods cannot be treated as goods cleared in terms of Paras 1(a) and 1(b) of the notification. Finally, the learned Advocate mentioned that the findings that the moulds were not branded goods is based on presumption since the moulds were also bearing the respective names.
3. On the other hand Shri Ashok Kumar, learned DR, submitted that the moulds for injection moulding machines and waste and scrap were not branded goods and the Appellants could have availed exemption under Notification No. 1/93; that the fact that they had filed classification declaration showing full rate of duty in respect of these two items would amount to opting out of the exemption contained in Notification No. 1/93.
4. We have considered the submissions of both the sides. The relevant clause of Notification No. 1 /93-C.E, dated 28-2-93 reads as under :-
“Notwithstanding the exemption contained in Paragraph 1 of this notification, a manufacturer shall have an option for not availing of the benefit of the exemption contained in said paragraph and to pay duty of excise at the rate applicable to the specified goods but for the exemption contained in the said Paragraph 1, subject to the condition that such manufacturer shall pay duty at the rate applicable but for aforesaid exemption on all subsequent clearances of specified goods made after availing such option, in a financial year in which such date of option falls.”
5. The clause as reproduced above refers to Paragraph 1 of the Notification. Paragraph 1 contains the provision for exemption from whole of the duty up to Rs. 30 lakhs and thereafter concessional rate of duty. In case of availment of Modvat, Concessional rate of duty from the beginning of the clearances is chargeable. Para 4 of the notification provides that exemption shall not apply to the specified goods bearing the brand name or trade name, registered or not of another person. The Appellants have clearly mentioned in their classification declaration that they are manufacturing branded goods for Salora, Texla, E.C.I., etc. Once the Appellants are manufacturing goods affixed with the brand name of another person they are excluded from the benefit of Notification No. 1793 in terms of Paragraph 4. In view of this the question of exercising an option for not availing of the benefit of exemption contained in Paragraph 1 of the notification is not available to the Appellants. They have expressly mentioned that even the moulds were being affixed with the brand name of the customers and no material to counter the said claim has been adduced by the Revenue. Even in their reply to the show cause notice they had clearly mentioned this fact that T.V. manufacturers sometime placed orders for moulds with their name embossed on them. In view of the fact that their finished products were affixed with the brand name which make them ineligible for the benefit of notification it cannot be said that they had opted not to avail the benefit of the notification in terms of the non obstente clause. The Tribunal has also held in the case of Products and Ideas, relied upon by the learned Advocate, that the goods bearing brand name of another person cannot be treated as specified goods under notification. We, therefore, set aside the impugned Order and allow the appeal.