Tribunal upholds penalty for PVC pipe makers using registered brand, cites Supreme Court precedent

The Tribunal upheld the demand confirmation and penalty imposed under the Central Excise Act, 1944, denying small scale exemption to PVC pipe manufacturers for using a brand name registered to another entity. Despite arguments regarding the applicability of a new notification, the Tribunal ruled in favor of the Revenue, citing a Supreme Court decision on brand name usage. The appellants were granted cum-duty price entitlement but the appeal was otherwise dismissed.

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Issues:
Appeal against demand confirmation, Small scale exemption denial, Brand name usage, Benefit of Notification denial, Cum-duty price entitlement.

Analysis:
The appeal was filed against an order confirming a demand of Rs. 4,83,288/- with interest and penalty under Section 11AC of the Central Excise Act, 1944. The appellants, engaged in manufacturing PVC pipes under Chapter Heading 39, were availing small scale exemption under Notification No. 9/1998-C.E. Revenue officers found the appellants clearing goods under the brand name "Kothari" belonging to another company. A show cause notice was issued, denying exemption due to the use of another brand name. The demand was confirmed, and a penalty imposed, which the Commissioner (Appeals) upheld.

The appellant argued that the demand post-April 1, 1999, after Notification No. 9/98 was rescinded and replaced by 9/99-C.E., is not sustainable. They contended they were using the brand name "Kothari Pipes" and not infringing on the exemption. However, the Revenue contended that the brand name was registered to another entity, citing a Supreme Court decision to support denying the exemption based on brand name usage.

The Tribunal found that the brand name "Kothari" was registered to another entity under the Patents and Trademarks Act, and the appellants were indeed using this brand name for their goods. Relying on the Supreme Court decision, the Tribunal held that even a partial brand name connection can deny SSI notification benefits. The argument that the new Notification No. 9/99-C.E. post-April 1, 1999, should apply was dismissed since the appellants themselves claimed benefit under the old Notification in a later declaration.

Ultimately, the Tribunal found no merit in the appeal, except granting the appellants entitlement to cum-duty price. The appeal was disposed of accordingly.

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