Central Excise Act, 1944 – Exemption Notification no.12/2011-CE dated 1.3.2011 and Notification no.30/2004 dated 9.7.2004 – Brand name of another unit – Jute bags manufactured by appellants and supplied to the PSUs, various State Governments and Governmental agencies for use in packing of foods grains sold through the PDS – Exemption under Notification no.30/2004 dated 9.7.2004 denied on the ground that affixing the name, logo and particulars of buyers like FCI and the State Governments amounted to affixing on the jute bags a “brand name” – Held: In the instant case, what was in fact affixed to the jute bags was the name of the procurer agency in question such as the FCI, the State Government of Punjab and so on, the crop year, the name of the jute mill concerned, its BIS certification number and the statement that the food grains are manufactured in India – Such markings were made under compulsion of law, which are meant for identification, monitoring and control by Governmental agencies involved in the PDS – Such markings do not enhance the value of the jute bags in any manner nor is it the intention of the appellants to so enhance the value of jute bags, which is necessary if excise duty is to be imposed – Markings on the jute bags are not for the purpose of indicating a connection in the course of trade between the jute bag and some person using such name or mark – This being the case, it is obvious that there is no “brand name” involved in the facts of the instant cases – Appellant was entitled to the benefit of exemption – Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987 – Essential Commodities Act, 1955 – Jute and Jute Textiles Control Order, 2000 – Notification no.12/2011CE dated 1.3.2011 – Notification no.30/2004 dated 9.7.2004. Circulars/Government Orders/Notification: Circulars – Binding effect of – Held: The circulars that are issued by the Ministry of Finance are binding on the Department of Central Excise. Allowing the appeals, the Court
HELD: 1. A reading of letter dated 18.3.2011 written by the Jute Commissioner to the Commissioner (Central Excise) and circular dated 21.6.2011 issued by the Ministry of Finance would show that merely because the name of an institution is printed or embroidered on articles would not mean that they would become branded products. A brand name, in addition to the name or logo, would have to be given in order to attract excise duty. Also, mere affixing of the name of a manufacturer would not constitute a brand name. [Para 12] [1016-D-E]
2.1 A typical requisition order issued by the Directorate of Supplies and Disposals required the emblem of the purchaser and excise duty payable by the purchaser to be printed on the jute bags manufactured by the appellants. [Para 13] [1016-F]
2.2 A typical supply order placed by the Jute Commissioner also required, as a matter of law, that the purchaser’s name be put together with the name of the manufacturer’s mill as well as the BIS certification for purposes of identification of the jute bags to be used in the PDS. [Para 13] [1017-A]
3. In the instant case, what was in fact affixed to the jute bags was the name of the procurer agency in question such as the FCI, the State Government of Punjab and so on, the crop year, the name of the jute mill concerned, its BIS certification number and the statement that the food grains are manufactured in India. It is clear that all these markings have, on the pain of penalty, to be done by the manufacturers of the jute bags, given the Jute Control Order and the requisition orders made thereunder. Obviously, such markings are made by compulsion of law, which are meant for identification, monitoring and control by Governmental agencies involved in the PDS. Neither do such markings enhance the value of the jute bags in any manner nor is it the intention of the appellants to so enhance the value of jute bags, which is necessary if excise duty is to be imposed. This flows from the expression “…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…”. In the present case, the markings on the jute bags are not for the purpose of indicating a connection in the course of trade between the jute bag and some person using such name or mark. The markings are by compulsion of law only in order that Governmental authorities involved in the PDS may identify and segregate the aforesaid jute bags. This being the case, it is obvious that there is no “brand name” involved in the facts of the present cases. [Para 18] [1020-F-H; 1021-A-B]
Kohinoor Elastics (P) Ltd. v. CCE (2005) 7 SCC 528 – distinguished.
CCE v. Stangen Immuno Diagnostics [2015] 4 SCR
528 : (2015) 11 SCC 761 ; CCE v. Sanghi Threads (2015) 14 SCC 701 – relied on.
4. The circulars that are issued by the Ministry of Finance are binding on the department of Central Excise. [Para 19] [1021B] CIT v. Trans Asian Shipping Services (P) Ltd. [2016] 3 SCR 337 : (2016) 8 SCC 604 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.