2005 (4) TMI 470 - AT - Central Excise

Tribunal decision on brand name confiscation and penalties, emphasizing proof of ownership.

EX THOS ELECTRONICS PVT. LTD. Versus COMMISSIONER OF C. EX., DELHI-III

EX THOS ELECTRONICS PVT. LTD. Versus COMMISSIONER OF C. EX., DELHI-III - 2005 (192) E.L.T. 905 (Tri. - Del.) Issues:Confiscation of goods and imposition of penalty under Central Excise law for manufacturing goods bearing brand names of other persons.Detailed Analysis:1. Confiscation of Goods and Imposition of Penalty:- The appellants, a small scale unit, were manufacturing goods like emergency lights, telephones, and calculators using parts purchased locally and imported from abroad.- Central Excise Officers seized finished goods during a visit to the factory premises.- The Deputy Commissioner confiscated the finished goods and imposed a redemption fine of Rs. 3 lakhs along with a penalty of Rs. 6 lakhs on both appellants for manufacturing goods bearing brand names of other persons.- The Commissioner (Appeals) upheld the confiscation and penalty.- The appellants argued that they were not affixing the brand names of other persons deliberately, as some parts purchased already bore brand names.- The appellants claimed that the benefit of small scale exemption notification should apply only when goods bear the brand name of another person, which was not the case for all brand names used.- The Tribunal considered that unless it is proven that the brand name belongs to another person, the benefit of the notification cannot be denied.- The Tribunal upheld the confiscation of goods bearing the brand names Citizen and Casio but set aside the confiscation of goods with other brand names due to lack of evidence regarding ownership of those brand names.- The redemption fine was reduced to Rs. 30,000, and the penalty on the appellant-company was reduced to Rs. 10,000.- The penalty imposed on the Director of the Company was set aside as it was not deemed fit in this case.2. Benefit of Exemption Notification:- The Notification No. 16/97-C.E. specifies that the exemption is not available for excisable goods bearing the brand name of another person, whether registered or unregistered.- The Tribunal emphasized that the appellants did not contest that the brand names Citizen and Casio belonged to other persons, making goods with these brand names liable for confiscation.- It was noted that the Revenue failed to provide material evidence regarding the ownership of other brand names used by the appellants, leading to the decision that goods with those brand names were not liable for confiscation.- The Tribunal cited a previous case to highlight that unless the identity of the person to whom the brand name belongs is known, the benefit of the notification cannot be denied.In conclusion, the Tribunal upheld the confiscation of goods with specific brand names belonging to other persons but set aside the confiscation of goods with brand names lacking evidence of ownership by others. The reduction of redemption fine and penalty was granted based on the findings related to the brand names used in the manufacturing process.