MODEL SOAP COMPANY Vs. COLLECTOR OF CENTRAL EXCISE
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
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(1.) HEARD Dr. Samir Chakraborty, learned Counsel for the Stay Petitioners. He referred to para 7 of exemption Notification No. 175/86 and also Explanation VIII ibid and submitted that the decision under challenge proceeds on a wrong appreciation of the legal position referred lo above. The applicants are small scale industry manufacturing soap some portion of which is manufactured against the specific orders of the hotels and customers like Indian Airlines. Some marks arc embossed in the product as per the directions of the customers. The Department has taken a view that since the product soap carries the trade name or brand name of another person and since that person is not eligible for the small scale exemption benefit, the soap manufactured by the applicants and sales cleared by them with such marks would not get covered by the exemption notification. In this connection, Dr. Chakraborty pointed out that the customers for whom the said goods arc supplied are not engaged in trade of such products and hence the explanation referred to would not cover the product in question. He also pleaded that the applicants arc having financial difficulty and it would cause undue hardship if they arc called upon lo pre-deposit the amount of duly demanded during the pendency of the appeal. He pleaded for grant of slay.
(2.) Shri A. Choudhury, learned JDR opposed the arguments and stated that the mark embossed on the soaps clearly establishes a link between the product and the person who is making it available to his customers as is being done in this case by the hotels or Indian Airlines as the case may be. The relevant expression used in para 7 of the exemption Notification docs not refer to manufacturer or factory but only refers to a person. As long as that person is not eligible for thc benefit of exemption Notification the product cleared by the applicants would not qualify for the said benefit in terms of the above said provisions. He, therefore, opposed the prayer for grant of stay.
We have considered the arguments advanced by both the sides. We had occasion lo deal with the similar type of issue while hearing certain stay matters. Similar argument had been advanced on behalf of the respondents and we were not inclined to accept it as making out a prima facie case against the applicants. In such cases we have granted stay and referred the appeals to Special Bench for disposal since the issue for decision would be the applicability of small scale industries exemption Notification No. 175/86. Accordingly, we grant the stay prayed for and waive pre-deposit of the duly demanded as a condition for the hearing of the appeal. It was clarified by the representative of the applicant that their annual turnover is of the order of about Rs. 10 lakhs and their factory is unencumbered. We, therefore, direct that the applicants should give an undertaking to the Collector not to alienate their fixed assets during the pendency of the appeal. Registry is directed lo transfer the appeal to Spl. Bench, New Delhi for disposal.;
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