Judgment:
1. Cookie Man Foods India (P) Ltd. [hereinafter referred to as the assessee] are engaged in the manufacture and sale of 'Cookies'.
Officers of Central Excise visited their sale outlet at Spencer Plaza on 11-4-2001 and found that they were selling 'cookies' in plastic pouches/containers on which the brand name 'Cookie Man' and the connected logo [belonging to an Australian company] were printed. One of the Directors of the assessee, Shri Chandraksekaran admitted that they were using the brand name 'Cookie Man' belonging to the Australian company, but added that they had obtained permission for using it in India. He also claimed that the 'cookies' were different from biscuits and were classifiable under SH 1905.90 of the CETA Schedule. The officers could gather evidence indicating that 'cookies' were nothing but biscuits. From the results of the investigations, it appeared to the department that the 'cookies' manufactured by the assessee were classifiable as biscuits under SH 1905.11 and that SSI exemption was not available to the 'cookies' which were cleared under the brand name of others who were not eligible for SSI exemption. A show cause notice dated 20-12-2002 was accordingly issued to the assessee demanding duty of Rs. 31,31,897/- [along with interest under Section 11AB of the Central Excise Act] for the period January 2000 to October 2002 and proposing to impose penalties on the assessee under Section 11AC of the Act and Rule 25 of the Central Excise (No. 2) Rules 2001. The demand of duty and other proposals were contested by the assessee. In adjudication of the dispute, the Commissioner of Central Excise confirmed demand of duty only to the extent of Rs. 3,66,102/- against the assessee and imposed on them a penalty of equal amount under Section 11AC. She also ordered levy of interest on the duty amount under Section 11AB. The assessee has appealed against this decision of the Commissioner. The Revenue's appeal is against the dropping of a major part of the demand raised in the show-cause notice.
2. Heard both sides. After considering their submissions, we find that, in the Revenue's appeal, the Revenue's plea is for denying the benefit of SSI exemption to the 'cookies' cleared in plastic covers/paper napkins which did not bear brand name 'Cookie Man. It is the appellant's case that, though these 'cookies' were cleared unbranded, the relation between product and the brand-name owner was established by the fact that the bills under which the 'cookies' were sold were titled 'Cookie Man Foods'. Because of this relation, the cookies sold unbranded to customers for immediate consumption were not eligible for the benefit of SSI exemption. Ld. SDR has reiterated this case of the Revenue. Ld. Counsel countered the above argument on the strength of the Supreme Court's judgment in CCE v. Superex Industries 2004 (174) E.L.T. 4 (S.C.) and the Tribunal's decisions in the cases of Connaught Plaza Restaurant Pvt. Ltd v. Commissioner and Sai Aditya Hotels & Super Markets (P) Ltd - 2005 (186) E.L.T. 188 (Tri. - Bang.). We find that the Tribunal's decision in the case of Con-naught Plaza Restaurant (supra) was relied on by the Commissioner to hold that, merely because the unbranded cookies were sold from the retail outlet which exhibited the brand name of 'Cookie Man', they could not be denied SSI benefit under the notification. The Revenue has not intelligibly distinguished the case on hand from that of Connaught Plaza Restaurant (supra). We have found striking parallel between the two cases. In the case of Connaught Plaza Restaurant (supra), the department wanted to deny the benefit of SSI exemption on 'Soft Serve', which was cleared without affixing any brand-name, from a retail outlet of 'McDonald'. It was held that, merely because the product was sold from the outlet of 'Mc Donald', it could not be claimed that it was bearing Mc Donald's brand name. Similarly, it is not correct to consider the unbranded cookies sold from the retail outlets which exhibited the brand name 'Cookie Man', as branded goods by mere reason of the goods having been cleared from a 'Cookie Man' outlet.
3. It was pointed out by Id. SDR that the bills covering the sale of unbranded cookies were titled 'Cookie Man' and therefore it should be held that the goods covered thereunder were cleared under the said brand-name. There is no dispute of the fact that the sale bills had the brand-name 'Cookie Man' printed thereon. But this per se can be no reason to hold that the goods sold under such bills were cleared under the said brand-name. In the case of Sai Aditya Hotels & Super Markets (supra), the cakes and pastry sold in a restaurant for immediate consumption did not bear any brand-name. But the word 'Nilgiris' was printed on the sale bills. It was held by the Tribunal that, on account of this fact alone, the items sold under the bills could not be held to be branded goods and accordingly SSI exemption under Notification No.1/93-C.E. was held to be admissible to the said items. In the case of Superex Industries (supra), it was held by the Supreme Court that exemption under SSI notification was not deniable for the mere reason that the specified goods, though not branded, were cleared under invoices in which the brand name of another person was printed. Thus, we find, the Revenue's case is hit by the case law cited by Id.
Counsel. The Commissioner has rightly allowed SSI benefit to the assessee in respect of the unbranded cookies sold at their outlets for immediate consumption. Hence we dismiss the appeal of the Revenue.
4. The assessee, in their appeal, has raised numerous grounds against the demand of duty confirmed against them by the adjudicating authority. Their counsel has submitted that some of these grounds are not pressed. Only two grounds of the appeal have been pressed before us and the same are reproduced below: (a) The appellants submit that they had only claimed the benefit of CENVAT credit on duty paid inputs to the extent of Rs. 8,529/- during 2002-03 and had not availed of the same. In the circumstances, the order confirming duty by holding that the sale made by the appellants would come under the purview of notification 9/2002, dated 1-3-2002 and chargeable to 60% of normal rate of duty has resulted in a duty liability of Rs. 2,45,936/-. It is submitted that there has only been a claim and no availment and therefore the appellants do not claim the duty on inputs. Under these circumstances, their clearances would not come under 9/2002 and would come only under 8/2002. The payment of duty of Rs. 2,45,936/- would only be nil. The portion of the order needs to be set aside.
(b) The appellants submit that their clearances would come under Notification No. 8/2002 and the duty demand would be reduced by Rs. 2,45,936/-. And the balance duty if any that is payable is Rs. 1,28,695/- which has been deposited pursuant to the impugned order.
Ld. Counsel has submitted, with reference to the above grounds, that the assessee is prepared to expunge the credit of Rs. 8,529/- from their Cenvat account so as to be entitled to the benefit of Notification No. 8/2002. Ld. SDR has pointed out that this plea was never raised before the adjudicating authority. After considering the submissions, we are of the view that, as the credit of Rs. 8,529/- is said to be remaining unutilized, the case requires to be remanded to the Commissioner for verification of the fact pleaded by the Counsel and, in the event of the above credit still remaining unutilized, for considering the assessee's alternative plea for the benefit of Notification No. 8/2002. Accordingly, we set aside that part of the impugned order which is against the assessee and allow their appeal by way of remand, directing the Commissioner to readjudicate the case in accordance with law after considering the alternative plea of the assessee. Needless to say, the assessee shall be given a reasonable opportunity of being heard.
(Operative portion of the order was pronounced in open Court on 27-9-2005)