In As You Like It, Jaques speaks of a motley fool's brain, "which is as dry as the remainder biscuit." But this crunchy story from the dossiers of the tax tribunal is of interest: Cookie Man Foods India (P) Ltd vs Commissioner of Central Excise.

Rewind to April 11, 2001, when a few excise officers visited Cookie Man's sale outlet in Spencer Plaza, Chennai. They found that the shop was selling `cookies' in plastic pouches/containers on which the brand name `Cookie Man' and the connected logo were printed.

"Cookie Man Pty Ltd (Cookie Man) is an all Australian owned business which is easily recognised by its distinctive, bright decor and the unique travelling oven which bakes the fresh, mouth watering biscuits which are synonymous with the Cookie Man trade mark," informs www.cookie-man.com.au. "From its humble beginning with one cookie type, first introduced some forty years ago, the level of sophistication of the concept and range of products has greatly expanded."

Before you rush to pick from `some 40 fresh baked cookie varieties, 20 varieties of cream filled and chocolate coated cookie products, sweet and savoury patisserie lines', let us find out what the officers did. They interviewed a director of the company, who admitted that the shop was 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."

However, "the officers could gather evidence indicating that `cookies' were nothing but biscuits." Then they sent a missive to the company saying that it was not eligible for SSI (small-scale industry) exemption because the `cookies' were cleared under the brand name of others who were not eligible for SSI exemption. A duty demand was raised for Rs 31 lakh.

Cookie Man went to the Commissioner for remedy. She confirmed demand of duty to the extent of Rs 3.7 lakh, and imposed a penalty of equal amount. Against this, the company appealed. So did the Revenue, protesting against `the dropping of a major part of the demand raised in the show-cause notice'.

The taxman wanted to deny the benefit of SSI exemption to `cookies' cleared in plastic covers/paper napkins, which did not bear brand name `Cookie Man'. 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', pointed out the taxman. "Because of this relation, the cookies sold unbranded to customers for immediate consumption were not eligible for the benefit of SSI exemption," said B. L. Meena arguing for the Department.

In response, it was N. Venkataraman who represented the company. He cited in support of his argument, past decisions such as a 2004 decision of the apex court in CCE vs Superex Industries, and also tribunal decisions in Connaught Plaza Restaurant Pvt. Ltd (2003) and Sai Aditya Hotels & Super Markets (2005).

The Connaught Plaza case was a `striking parallel' to the case on hand, noted the tribunal. There, the department had 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's. "It was held that, merely because the product was sold from the outlet of McDonald's, it could not be claimed that it was bearing McDonald'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," reasoned P.G. Chacko and T.V. Sairam, Members of the tribunal, who heard the Cookie Man case.

Meena had pointed out that the bills covering the sale of unbranded cookies were titled `Cookie Man' and that therefore the sale should be held to be of goods covered under the said brand name. On this, the tribunal observed: "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."

To explain, the tribunal cited the Sai Aditya Hotels case, which was about cakes and pastry sold without any brand name in a restaurant for immediate consumption. "But the word `Nilgiris' was printed on the sale bills." What was the decision then? The tribunal had held that, on account of this fact alone, the items sold under the bills could not be held to be branded goods; accordingly SSI exemption was held to be admissible to the said items.

Superex Industries decision was on similar lines. The Supreme Court had held 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.

Resuming the Cookie Man case, the tribunal said that the Revenue's arguments were hit by the case laws cited by Venkataraman.

"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," reads the tribunal's order.

Lest a tale be kept hanging, let's return to Jaques `brain' analysis, in the Bard's words: "After a voyage, he hath strange places cramm'd with observation, the which he vents in mangled forms."

One may ask if Cookie Man turned out to be a tough cookie for the taxman. Rather than take tangled positions on that poser, let me wrap with a quote of Fran Lebowitz in no mangled form: "Children ask better questions than adults. `May I have a cookie?' `Why is the sky blue?' and `What does a cow say?' are far more likely to elicit a cheerful response than `Where's your manuscript?' Why haven't you called?' and `Who's your lawyer?'"

And, just in case in you're looking for a cookie, Peter Elligett, Managing Director of Cookie Man Pty Ltd offers many options in the `Freshly Baked' category, on his site. Such as: Almond Tea Crunch, Brandy Snap, Cheesies, Forest Berries, Greek Almond, Jewel, Melting moment, Peanut Crisp, Triple Choc, Vanilla Ring, Wild Passion, and more

Tailpiece

"As a brand ambassador, my greatest satisfaction came from... "

"The money you made in the deal?"

"No, from the realisation that I've been providing a service!"