2010 (5) TMI 461 - AT - Central Excise

Tribunal overturns decision on exemption benefits due to brand name use, criticizes admission of additional evidence

The Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order and restoring the adjudicating authority's decision. It held that the ... SSI exemption – Brand name of another – Brand name of foreign collaborator used by assessee - no difference whether the goods on which the trade name or mark is used are the same in respect of which the trade mark is registered - Even if the goods are different so long as the trade name or the brand name of some other company used, the benefit of notification not available Issues Involved:1. Wrongful availment of exemption benefits under Notification No. 9/2003-C.E.2. Use of brand name of another person.3. Invocation of extended period of limitation.4. Admissibility of additional evidence at the appellate stage.5. Compliance with procedural requirements under Section 35A of the Central Excise Act.Detailed Analysis:1. Wrongful Availment of Exemption Benefits under Notification No. 9/2003-C.E.The respondents, manufacturers of vacuum pumps under the brand name 'Woovac', availed benefits under Notification No. 9/2003-C.E. and paid duty at a concessional rate. The department issued a show cause notice alleging wrongful availment of these benefits, leading to a short payment of duty by 6.4%. The adjudicating authority confirmed the demand, which was later set aside by the Commissioner (Appeals).2. Use of Brand Name of Another PersonThe department contended that the respondents used the brand name 'Woovac' belonging to M/s. Woosung Vacuum Company Ltd., South Korea, which disqualified them from availing benefits under the said Notification. The adjudicating authority found that the brand names 'Woovac' and 'Woosung' exclusively belonged to the foreign collaborator, and the respondents were not eligible for exemption. The Commissioner (Appeals) disagreed, citing lack of evidence that the brand name used by the respondents belonged to the Korean party, and referred to a Tribunal decision stating that continuous use of a trade name could confer ownership.3. Invocation of Extended Period of LimitationThe adjudicating authority rejected the respondents' defense of limitation, holding that there was no evidence to show that the department had prior knowledge of the use of the brand name. The Commissioner (Appeals) did not interfere with this finding, and the Tribunal also upheld this view, noting the respondents' failure to demonstrate departmental knowledge.4. Admissibility of Additional Evidence at the Appellate StageThe Tribunal criticized the Commissioner (Appeals) for considering new evidence (photographs, commercial literature, and name plates) at the appellate stage without sufficient justification. It emphasized that the appellate authority should primarily analyze the original order based on existing records and not introduce new grounds or evidence without proper reasons.5. Compliance with Procedural Requirements under Section 35A of the Central Excise ActThe Tribunal highlighted the procedural requirements under Section 35A, stressing that the Commissioner (Appeals) must first ascertain the points for determination and analyze the original order based on materials available at that time. The appellate authority should not assume the role of the original authority or allow additional evidence without justified reasons.Conclusion:The Tribunal allowed the appeal, setting aside the impugned order of the Commissioner (Appeals) and restoring the order of the adjudicating authority. The Tribunal held that the respondents were not entitled to exemption benefits under Notification No. 9/2003-C.E. due to the use of the brand name of another person. It also upheld the invocation of the extended period of limitation and criticized the Commissioner (Appeals) for procedural lapses in admitting additional evidence at the appellate stage.