2005 (4) TMI 389 - AT - Central Excise

Tribunal remands case to clarify brand ownership; assessable value determined, penalty reduced for using unauthorized brand.

The Tribunal remanded the case to ascertain the factual position of brand ownership regarding 'Aqua Vita.' The Appellants were found ineligible for ... SSI Exemption - Brand name - Valuation Issues involved:Whether the excisable goods manufactured and cleared by M/s. CEASA India Ltd. are bearing the Brand Name of another person.Analysis:1. The Appellants, M/s. CEASA India Ltd., and their director were involved in four appeals questioning whether the goods they manufactured and cleared bore the Brand Name of another person. The Appellants manufactured Water Purifying Machines in collaboration with a foreign company and claimed small-scale exemption. The Central Excise duty was demanded based on the goods bearing brand names 'Aqua Pure' and 'Aqua Vita,' which were allegedly owned by other entities. The Appellants argued that until April 1999, all goods sold by them, including those with the 'Aqua Pure' brand name, were imported, not manufactured. They contested the duty quantification and cited a Supreme Court judgment regarding cum-duty price determination.2. The Brand Name 'Aqua Vita' ownership was disputed. The Appellants claimed ownership and applied for its registration. They argued that royalties paid were for technical know-how, not brand name use. Affidavits and agreements supported their claim. The Appellants also defended against penalties, stating they believed they were eligible for the exemption. The director's role was limited to marketing, not production, absolving him of penalty under the Central Excise Rules.3. The Respondent argued based on statements from the director claiming ownership of the 'Aqua Vita' brand by the foreign collaborator. They highlighted the Joint Venture Collaboration Agreement and emphasized the director's knowledge of the brand details. Regarding cum-duty price, they referred to a Supreme Court decision on including tax amounts in wholesale prices.4. The Tribunal considered both sides' arguments. Concerning 'Aqua Vita,' the Revenue relied on the director's statement, while the Appellants presented affidavits contradicting brand ownership claims. Lack of inquiry into brand ownership led to a remand to ascertain the factual position. As 'Aqua Pure' belonged to another entity, the Appellants were ineligible for the exemption. The Tribunal found no evidence to support the presumption that imported goods were only components, not the final product. The assessable value was to be determined based on the cum-duty price, with a penalty imposed on the Appellant company for availing the exemption despite using another brand name. The penalty was reduced for the Appellant company, and no penalty was imposed on the director.5. The Tribunal's decision remanded the brand ownership issue for further investigation and clarified the duty liability based on brand ownership and importation details. The penalty was adjusted, emphasizing the need for accurate assessment and compliance with excise duty regulations.