ORDER
K. Prakash Anand, Member (T)
1. This is an appeal filed before this Tribunal under Section 35B of the Central Excises and Salt Act, 1944 against Order No. 321/Cal./82 dated 23rd April 1982 passed by the Appellate Collector of Central Excise, Calcutta.
2. Appellants have stated that they are unable to attend the hearing and that the case may be decided in absentia on the basis of written submissions. We are proceeding to do so accordingly.
3. On behalf of the appellants, it is stated that they had purchased from their factory at Bombay 3600 litres of Varnish under 4 different invoices on different dates. It is stated that these goods were under a particular brand name of the manufacturers and cleared on payment of appropriate Central Excise duty. The appellants subsequently sold the same product under a different brand name and code number, although the containers and price were not altered. It is claimed that in this transaction, the appellants acted merely as traders and they were not manufacturers of the goods in question. Appellants concede that they are also manufacturing varnish, but, it is stated that the goods in question were not their production. Nor has the Department been able to establish this. It is stated that they were able to establish before the Appellate Collector with reference to dates of despatches, particulars of invoices, etc., that the goods in question were brought on payment of duty from the Bombay factory of the appellants. However, the Appellate Collector rejected the appeal on the ground that duty was payable because appellants converted the goods from one brand name to another brand name. The appellants concede that they are guilty of violating the rules in so far as they had brought in duty paid goods into their factory premises without the knowledge of the Excise authorities. This, however, it is stated, is not the subject of the “”show cause notice. As regards the conversion of goods from one brand name to another, the appellants have cited the two decisions of the Bombay High Court in their favour viz., Ceramics & Electrical Industries Pvt. Ltd. and Ors. v. Union of India and Ors.-1981 E.L.T. 338, and Carona Sahu Co. Ltd. v. Superintendent Central Excise and Ors.-1981 E.L.T. 730 (Bom.)=1982-E.C.R. 129D. It is stated that as per these and various other decisions, it is by now well established that fixing of brand or trade name does not constitute a process of manufacture as this does not result in any change in the identity of the goods or the coming into existence of some new or different product, warranting the levy of duty.
4. Mrs. J.K. Chander the learned S.D.R. reiterates the facts and the view contained in Order-in-Appeal. She, however, has nothing to add when asked about the relevant provisions of the Act or rules under which conversion from one brand name to another by a trader can be considered to attract duty.
5. The respondent, i.e., the Collector of Central Excise, Calcutta has stated, in what he has termed as “cross objections”, that the appellants have failed to produce any document evidencing that the impugned goods had discharged their duty liability at the time of clearance from their factory at Bombay. It is, further, added that duty paid excise goods cannot be received in the appellants’ factory without prior permission of the Central Excise authorities and without following of the procedure prescribed. For these reasons, it is stated that the Order-in-Appeal deserves to be upheld. These contentions obviously are not in the nature of cross objections. They are being treated as written submissions on behalf of the respondents.
6. We have carefully considered the facts of the case and the submissions made by both sides. The appellants have stated that on the basis of the particulars furnished by them, they were able to establish before the Appellate Collector that the impugned goods were received on payment of duty from their factory at Bombay. Looking at the Order-in-Appeal we find that the Appellate Collector has admitted that the impugned products on which duty has now been demanded, were, in fact received by the appellants from their. Bombay factory. He has upheld the demand of duty on the sole ground that the goods cleared by the appellant have been marketed under a different brand name and that the appellants are liable to pay duty because there has been conversion of the goods from one brand name to another brand name. We find that this argument is wholly unsustainable. Levy of excise is on manufacture of goods. Branding of products is a trade practice, not a manufacturing process. In this connection, appellants have been able to support their case fully by referring to the decision of the Bombay High Court in the case of Ceramic & Electrical Industries Pvt. Ltd. and Ors. v. Union of India and Ors. (supra) and also in the case of Corona Sahu Co. Ltd. v. Superintendent Central Excise and Ors. (supra). In these cases, it was held that merely because a company puts its label on the goods before delivery, such a company does not become a manufacturer of the goods. Nor can it be said that the goods in such a case can be said to have been manufactured on behalf of the customer, because by fixing of the label the goods do not change their identity nor do they become some new or different product.
7. In view of the clear finding of the Appellate Collector in this regard, the respondent cannot now contend with any conviction that the appellants have failed to produce documentary evidence to show that the impugned goods had discharged their duty liability at the time of clearance from their factory at Bombay. As regards his other contention that duty paid goods could not be received by the appellant in his factory without prior permission of the Central Excise authorities and without following procedure prescribed, this cannot be disputed. However, failure to follow the prescribed procedure cannot justify demand for duty in respect of goods on which, as per the order of the Appellate Collector, it is shown that duty has already been paid at the place of origin.
8. In the light of our above findings, we set aside the order of the Appellate Collector of Central Excise, Calcutta and allow the appeal.