2006 (9) TMI 423 - AT - Central Excise

Appeal dismissed, denial of input duty credits upheld under 'house mark' distinction.

The appeal was dismissed, upholding the impugned order and sustaining the denial of input duty credits to the appellants by the Commissioner (Appeals). ... Medicament - Brand name vis-a-vis House mark Issues involved: Denial of input duty credits to the appellants by the Commissioner (Appeals) u/s 1999, classification of finished goods under SH 3303.10, distinction between 'brandname' and 'house mark' for duty payment, applicability of Astra Pharmaceuticals case judgment.Denial of input duty credits: The appeal was filed against the denial of input duty credits to the appellants by the Commissioner (Appeals). The appellants, engaged in manufacturing pharmaceutical products, had taken credit on inputs used in the manufacture of medicaments cleared under the brandname 'ALFRED BERG.' The department objected, stating that the 'logo' used by the appellants was a 'house mark' and not a 'brandname,' resulting in the finished goods being classified under a different duty rate. Both the original authority and the first appellate authority upheld this view, leading to the present appeal.Classification of finished goods: The department contended that the finished goods were not 'P or P medicaments' but should be charged at a 'nil' rate of duty as medicaments other than 'P or P medicaments.' The appellants' use of the 'house mark' 'ALFRED BERG' was deemed to project the company's image in the market, falling under a different duty classification. The lower authorities held that the appellants could not claim Modvat credit for duty paid on inputs used in manufacturing goods cleared under the 'house mark,' in line with the Apex Court's judgment in Astra Pharmaceuticals case.Distinction between 'brandname' and 'house mark': The Apex Court's judgment in Astra Pharmaceuticals case was applied to the present case, emphasizing the difference between a 'trademark' and a 'house mark.' The 'logo' 'ALFRED BERG' was considered a 'house mark' intended to project the company's image, leading to the goods being classified under a different duty rate. The lower appellate authority correctly held that the finished goods should be charged at a 'nil' rate of duty, as they were not 'P or P medicaments,' and the denial of input duty credits was sustained.Applicability of Astra Pharmaceuticals case judgment: The lower authorities correctly applied the Astra Pharmaceuticals case judgment to the facts of the present case, highlighting the distinction between a 'trademark' and a 'house mark.' The 'logo' 'ALFRED BERG' was deemed a 'house mark,' projecting the company's image, resulting in the finished goods being classified under a different duty rate. The appeal was dismissed, upholding the impugned order and sustaining the denial of input duty credits.