Raymond UCO Denim Pvt Ltd Vs Commissioner of Central Excise & Central Tax (CESTAT Bangalore)
Summary: The CESTAT Bangalore Bench allowed the appeal of Raymond UCO Denim Pvt Ltd against a central excise duty demand of ₹14,20,465 on ready-made garment samples manufactured for display, marketing and booking orders. The dispute concerned the period 1 October 2013 to 30 June 2017. The Tribunal delivered Final Order No. 21262/2026 on 22 October 2026.
The appellant manufactured ready-made garments for several third-party brands and paid excise duty on ordinary branded clearances. It explained that the disputed samples were kept at display centres, were not intended for retail sale, and carried the expression “Raymond UCO” only as its abbreviated corporate name rather than as a garment brand.
The appellant relied on Notification No. 30/2004-CE, amendments governing garments under Chapter 62, and CBEC Circular No. 947/8/2011-CX dated 21 June 2011. It argued that a corporate identifier on non-commercial samples was not a brand name, that there was no registered garment trademark, and that internal accounting entries did not evidence sales or consideration.
The Revenue maintained that Raymond UCO was a recognised name in the garment market and that displaying it on samples established a trade connection sufficient to constitute a brand name. Referring to the relevant notifications, it calculated duty at 2% on a stated aggregate value comprising conversion cost, fabric cost and courier charges.
The Tribunal found that the gross amounts reflected internal unit-wise performance accounting rather than proceeds from selling samples. It accepted that the labels indicated corporate identity, not brand identity, and noted that the samples were non-commercial and non-retail. Applying the cited circular, it held the confirmed demand unsustainable.
Consequently, the Tribunal set aside the Commissioner (Appeals)’ order dated 31 March 2022 and allowed the appeal with consequential relief, if any, in accordance with law. The ruling turns on the factual character of the samples and their labelling, rather than establishing a general exemption for every display sample.
FULL TEXT OF THE CESTAT BANGALORE ORDER
The issue in the present appeal is whether excise duty is payable by the Appellant on the goods manufactured only for displaying in display centre for marketing and order booking purpose and when such samples were never intended for sale and never sold.
2. The brief facts are alleging non-payment of excise duty for the period from 01.10.2013 to 30.06.2017, show cause notice dated 09.10.2018 was issued and Adjudication authority as per the Order-in-Original dated 17.11.2020 confirmed the demand and also imposed penalty under Section 11AC(1)(c) of the Central Excise Act, 1944. Aggrieved by said order, an appeal was filed before the Commissioner (Appeals) and Commissioner (Appeals) as per the impugned order dated 31.03.2022, confirmed the demand. Aggrieved by said order, present appeal is filed.
3. When the appeal came up for hearing, the Learned Counsel for the Appellant submits that the appellant is engaged in manufacture of Ready-Made Garments (RMG) classifiable under Central Excise Tariff Item (CETI) 6203 4200 of the Central Excise Tariff Act, 1985, for well-known brands such as Levi’s, Best Seller, Lee, Wrangler, etc., and such branded RMG are cleared on payment of appropriate Central Excise duty after affixing the respective brand name and Retail Sale Price (RSP) as supplied by the brand owners. There is no dispute regarding filing of returns or payment of duty on such clearances.
| Sl. No. | Company/ Legal Entity | Nature of Business | Brand Names |
|---|---|---|---|
| 1 | Arvind Limited | Denim & Garment manufacturing | Flying Machine, Arrow |
| 2 | Aditya Birla Fashion and Retail Limited | Apparel retail | Louis Philippe, Allen Solly |
| 3 | Reliance Retail Limited | Retail & apparel | DNMX |
| 4 | Best Seller India Private Limited | Apparel retail | Jack & Jones, only |
| 5 | VF Corporation | Apparel manufacturing | Lee, Wrangler |
| 6 | Levis Strauss (India) Pvt Ltd. | Apparel Retail | Levis |
4. The appellant does not own any garment brand, nor does it manufacture or sell RMG under the name “Raymond UCO” in the open market. Raymond UCO Denim Pvt. Ltd. is a joint venture company; “Raymond UCO” is merely the abbreviated corporate name.
5. Learned Counsel further submits that the goods falling under Chapter 62 are exempted as per Notification No. 30/2004-CE dated 09.07.2004 which was amended by Notification No. 15/2006-CE dated 01.03.2006, wherein all the goods other than those bearing a brand name or sold under a brand name having Retail price of Rs.1,000/- and above are exempted. In the present case, there is no dispute that the value of the goods is more than 1,000/- rupees whereas only by showing and affixing of name Raymond UCO, it is considered as branding. However, the goods are not branded product as alleged. Further to attract the goods as branded goods, there is no label which represents brand identity. The label only represents corporate identity and not a brand identity. There is no trademark used under the Trade Marks Act, 1999. The samples are non-commercial, non-retail items. Raymond UCO is not a registered brand for the garments. In this regard, Learned Counsel also draws our attention to the Circular No.947/8/2011-CX dated 21.06.2011 and submits that the Label or samples does not amount to use of trademark in a commercial or marketable sense. As per above Circular, even if name of an institution is printed or embroidered on an article would not mean that they would become branded products. There should be given order to attract excise duty and a mere fixing of name of a manufacture would not construe as a brand name. Further the samples are non-commercial in nature, they are not sold, do not reach consumers and do not create any brand name perception and therefore, cannot be treated as branded goods for excise purpose.
6. Learned Counsel further submits that the goods manufactured by the Appellant are not marketable, since there is no buyer, no seller, no price and no consideration. In the absence of above elements, Section 4 of the Central Excise Act, 1944 is not applicable and said goods cannot be considered as excisable goods. Learned Counsel further submits that the gross amount was collected based on the internal accounting entries which is meant for unit wise performance evaluation and not on sale of the goods. Promoting brand name is different from promoting product to include in ‘business auxiliary services’. Learned Counsel further submits that the demand and penalty confirmed by the Adjudication/ Appellate authority by invoking extended period of limitation is also unsustainable in the absence of any deliberate attempt on the part of Appellant for evasion of excise duty.
7. Learned Authorized Representative (AR) for the Revenue reiterated the finding in the impugned order and submits that as per the information available on websites, M/s. Raymond UCO Denim Private Limited is a well-known name in the field of Men’s Heritage Garments, Mood Indigo Garments, Baby Blue Garments, Men Blue Denim Jeans, Sky Blue Denim Jeans, Regular Carbon Jeans, etc. Even in the general market, the “Raymond UCO” is very well known in the field of garments and textile. Therefore, the name “Raymond UCO” affixed on these samples is nothing but an invented word or any writing which is used in relation to a product for the purpose of indicating or so as to indicate, a connection in the course of trade between the product or some person using such name or mark with or without any indication of the identity of that person. Hence the same was covered under the definition of brand name.
8. As per Notification No. 15/2016-CE dated 01-03-2016, amending Notification No.30/2004-CE dated 09.07.2004, Central Excise Duty was introduced on “All goods other than those bearing a brand name or sold under a brand name and having a retail sale price (RSP) of Rs. 1000/- and above”. For the said period, the conversion cost of the RMG, as charged and recovered by the Appellant was declared as Rs. 6,75,81,300/-. The Landed Cost of Fabric amount of Rs. 30,69,272/- and Courier Charges amount of Rs. 3,72,693/-, the total gross value for an amount of Rs. 34,41,965/-. As per Sl. No. 75(A) of Notification No.1/2011-CE dated 01-03-2011, as amended, in respect of RMG, “All goods other than those bearing a brand name or sold under a brand name and having a retail sale price (RSP) of Rs.1000/- and above” is chargeable to Central Excise Duty at 2%. Therefore, for the said period, Central Excise Duty liability on the RMG samples converted and cleared by the Appellant works out to [Rs 6,75,81,300/- + Rs 34,41,965/-]X 2%] = Rs 14,20,465/-.
9. Heard both sides and perused the records.
10. We find that the gross amount was taken as per the internal accounting entries which is meant for unit wise performance evaluation and not on sale of the goods. Promoting brand name is different from promoting product to include in ‘business auxiliary services’. Further as per the Circular No.947/8/2011-CX dated 21.06.2011, to attract the goods as branded goods, there is no label which represents brand identity. The label only represents corporate identity and not a brand identity. There is no trademark used under the Trade Marks Act, 1999. The samples are non-commercial, non-retail items. Thus, the impugned order confirming the demand is unsustainable and liable to be set aside.
11. Accordingly, the impugned order is set aside, and the Appeal is allowed with consequential relief, if any, in accordance with law.
(Order was pronounced in open court on 22.10.2026.)
