2013 (1) TMI 557 - AT - Central Excise

Tribunal Grants Stay, Rules in Favor of Appellants in Central Excise Duty Dispute

MANKOO MACHINE TOOLS PVT. LTD. Versus COMMISSIONER OF C. EX.. LUDHIANA

The Tribunal ruled in favor of the appellants in a case involving Central Excise Duty confirmation and penalties. The appellants successfully challenged ... Waiver of Pre-deposit – Stay Petition - SSI exemption – Brand name of another - Notification No. 8/2003-C.E., dated 1-3-2003 – Trade and Merchandise Marks Act, 1958 - Trade Marks Act, 1999 - Trade mark was registered in the name of M/s. Mankoo International Industries in the year 2004 - Whereas the appellants have using this trade mark which belonged to their family since 1981 onwards Held that:- Following the decision in case of BHALLA ENTERPRISES (2004 (9) TMI 109 - SUPREME COURT OF INDIA) that if the assessee is able to satisfy the assessing authorities that there was no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, it would be entitled to the benefit of exemption. An assessee would also be entitled to the benefit of the exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name. As per Sections 33 and 34 of Trade and Merchandise Marks Act, 1958 and Sections 33 to 35 of Trade Marks Act, 1999 that registration of trade mark by someone would not entitle to that person to interfere with or restrain the use of identical trade mark by any person or provided the said person or his predecessor has continuously used their trade mark from a date prior to the registration of trade mark by the third party. The appellant has been using the trade mark ‘Mankoo’ continuously since 1981. Therefore, registration of trade mark ‘Mankoo’ in favour of M/s. Mankoo International Industries prima facie would not affect the right already vested in the appellant. Therefore appellant has been able to make a strong prima facie case. Waiver of condition of pre-deposit. Stay Granted. Issues:1. Central Excise Duty confirmation against the appellant.2. Imposition of penalties on the company and director.3. Trade mark registration dispute affecting SSI exemption eligibility.4. Stay applications for waiver of pre-deposit conditions.Central Excise Duty Confirmation and Penalties:The appellants challenged the order confirming Central Excise Duty of Rs. 61,57,852 against them, along with penalties imposed. The jurisdictional Commissioner upheld the duty demand, interest, and penalties, alleging wrongful SSI exemption use under Notification No. 8/2003-C.E. due to using a trade mark belonging to another entity, M/s. Mankoo International Industries. The appellants sought waiver of pre-deposit conditions under Section 35F to hear their appeals.Trade Mark Dispute and SSI Exemption Eligibility:The appellants argued that their continuous use of the 'Mankoo' trade mark since 1981, despite later registration by M/s. Mankoo International Industries in 2004, entitles them to the trade mark rights. Citing Trade and Merchandise Marks Act provisions and relevant case laws, they contended that registration does not override prior usage rights. The Supreme Court precedents highlighted the importance of actual use over registration for trade mark rights.Waiver of Pre-Deposit Conditions:The appellants presented a strong prima facie case asserting their right to the 'Mankoo' trade mark based on historical usage. The opposing party, however, argued against granting the stay applications, emphasizing the registered ownership of the trade mark by another entity. The Tribunal analyzed the trade mark laws and case laws to determine that the appellant's continuous use of the mark since 1981 established their vested rights, unaffected by subsequent registration.Judgment and Stay Application Decision:Considering the arguments and legal provisions, the Tribunal found in favor of the appellants, granting the stay applications and waiving the pre-deposit conditions for duty demand, interest, and penalties. The decision was influenced by the appellants' strong prima facie case, supported by legal precedents emphasizing actual usage rights over mere registration. The appeals were allowed to proceed, with the condition of pre-deposit being dispensed with and recovery stayed until further proceedings.