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Judgment
Dilip Gupta, J
The Department has filed this appeal to assail the order dated 14.03.2022 passed by the Commissioner (Appeals). This order passed by the Commissioner (Appeals) rejects the appeal filed by the Department for setting aside the order dated 29.07.2021 passed by the Additional Commissioner dropping the proceedings initiated against the respondent by show cause notice dated 20.12.2019.
The respondent is engaged in wholesale, retail and manufacturing of gold jewellery. It transpires from the records that the Tamil Nadu Government introduced Tamil Nadu Marriage Scheme, the main objective of which was to provide financial assistance for marriage of poor girls in the States. Under the Scheme, apart from cash assistance, gold coins were also given to eligible beneficiaries. The Tamil Nadu Government floated a tender for procurement of 1,00,000/- (one lakh) 22 carat gold coins from dealers for distribution under the Marriage Assistance Schemes. It transpires that M/s TCJ Impex Private Limited, TCJ Impex was allotted the tender for supply of 1,00,000 numbers of 22 carat gold coins (each of 4 gms.) embossed with State Emblem of the Government of Tamil Nadu on one side of the gold coin and purity on the other side. TCJ Impex placed an order on the respondent for purchase of gold coins and the respondent supplied the gold coins embossed with the State Emblem.
A show cause notice dated 20.12.2019 was served upon the respondent for payment of central excise duty alleging that the gold coins were branded and were sold to TCJ Impex during the period 2014-15.
The respondent filed a reply to the show cause notice and the Additional Commissioner dropped the demand holding that the State Government was not trading in gold coins and the emblem of the State on gold coins cannot be termed as ‘brand name’.
Feeling aggrieved, the department filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) also dismissed the appeal holding that:-
“I further note that the respondents have contested that, vide Circular No. 71/71/94- CX dated 27.10.94, it was clarified that if there is no "trade" of goods on which a brand name has been put, the brand name provision would not apply. While going through the said circular, I note that relevant paras of the circular provides that:-
"5. As explained in paragraph 3 of the letter, to attract the mischief of the provisions relating to brand name, two conditions have to be satisfied.
(1) Such brand name must indicate a connection between the branded goods and some person using such brand name.
(2) Such connection should be in the course of trade.
Consequently, if there is no "trade" of such goods, the brand name provisions would not apply.
In this regard, I note that Section 4 of the State Emblem of India (Prohibition of Improper use) Act, 2005 has provided that:-
Prohibition of use of emblem for wrongful gain. No person shall use the emblem for the purpose of any trade, business, calling or profession or in the title of any patent, or in any trade mark or design, except in such cases and under such conditions as may be prescribed.
In view of the above provisions as mentioned in para 19 and 20 above and the restrictions as contained in said Section 4 & provisions contained in Board's said Circular dated 27.10.1994, I find that if there is no trade in the branded goods by the person owning the brand name, brand name provisions would not apply and exemption to such goods would be available.”
The Commissioner (Appeals) also placed reliance upon the decision of the Tribunal in Mohanlal Jewellers Private Limited vs. Commissioner of Central Goods, Service Tax & Central Excise, Chennai, Excise Appeal No. 40502 of 2020 decided on 07.02.2022.
This appeal has been filed by the Department to assail the aforesaid order dated 14.03.2022.
It cannot be disputed that the issue involved in the appeal is covered by the decision of the Tribunal in Mohanlal Jewellers Private Limited. The Tribunal after relying upon the decision of the Supreme Court in RDB Textiles Limited vs. Commissioner of Central Excise and Service Tax, Kolkata, 2018 (359) ELT 643 (S.C.) observed as follows:-
“The appellants in the course of their business have obtained orders for manufacturing gold coins from the Government of Tamil Nadu as well as from Chettinad Cements Corporation Pvt. Limited. We find that the coins manufactured for the Government were supposed to be used for the distribution to the beneficiaries‟ of the Government Scheme. We also find that as per the confirmation given by the Senior Manager of Chettinad Cements Corporation Pvt. Ltd., during the cross examination on 23.08.2019, the gold coins were meant for distribution to the stockists and dealers as incentives and they did not trade the gold coins so purchased. We find that the department confirmed the duty only on the premise that the appellants have manufactured branded jewellery. We find 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. Admittedly, inscribed or embossed on the gold coins manufactured by the appellants have their customers is certain identification with the respective customers who have got the gold coins manufactured for distribution only and not for use as a merchandise. As long as the customers of the appellants are not engaged in the trade/commerce/business, inscription on the gold coins cannot said to have in connection in the course of trade with the product manufacture.
On going by the ratio of the above judgments, we find that as long as the goods are not sold by the customers of the appellant in the brand name which they are manufactured, the same cannot be held bearing brand name making them dutiable. Therefore, we are of the considered opinion that as the appellants have not manufactured branded jewellery, the exemption contained in the said notification is applicable to them and the impugned order is not legally sustainable.”
(emphasis supplied)
In view of the aforesaid decision in Mohanlal Jewellers Private Limited and the Circular dated 27.10.1994 issued by Tax Research Unit of the Government of India, there is no merit in the appeal. It is, accordingly, dismissed.
(Order dictated and pronounced in the open Court)