2014 (12) TMI 404 - AT - Central Excise

Tribunal rules in favor of appellants on brand name dispute

M/s. WATERS (INDIA) PVT. LTD. Versus COMMISSIONER OF SERVICE TAX BANGALORE-SERVICE TAX

The Tribunal ruled in favor of the appellants in a case involving the interpretation of brand name usage for SSI exemption. The Tribunal found that the ... Denial of SSI Exemption - Benefit of Notification No.175/1986 dated 1.3.1986 - Use of other company's brand name - Held that:- onus of proof to show that the brand name belongs to another person is on the Department and we have already observed that the claim of the appellant that appellants are joint owners has not been contested and further there is no evidence produced to show that the brand name was owned by M/s. Millipore Corporation as alleged in the show-cause notice - no case has been made out against the appellants - Decided in favour of assessee. Issues involved:1. Interpretation of brand name usage for SSI exemption.2. Joint ownership of brand name.3. Departure from show-cause notice allegations.Interpretation of brand name usage for SSI exemption:The appeals involved a common issue regarding the denial of SSI exemption to the appellants for affixing the brand name 'Waters,' which was associated with a foreign company. The appellants contended that they used the brand name 'Waters (India)' and not 'Waters USA.' The Tribunal analyzed the usage of the brand name and observed that the format of 'Waters (India)' did not conclusively amount to the utilization of the brand name 'Waters USA.' The Tribunal emphasized that the association with the brand name owner should come to mind when assessing brand name usage. As there was no evidence to support the claim that customers associated the product with 'Waters USA,' the Tribunal ruled in favor of the appellants, stating that the Revenue failed to prove brand name usage.Joint ownership of brand name:The appellants argued that they were joint owners of the brand name, which the Commissioner (A) accepted. However, the lower authorities disputed this claim, asserting that the appellants did not contest that the brand name belonged to a foreign person. The Tribunal noted that if the agreement recognized joint ownership, it would negate the use of another entity's brand name. While the Commissioner (A) provided detailed arguments against considering the appellants as joint owners, the Tribunal did not delve into this aspect further, as it was unnecessary based on other considerations.Departure from show-cause notice allegations:The show-cause notice alleged the use of the brand name of M/s. Millipore Corporation, USA, against the appellants. However, the lower authorities introduced Waters Associates into the proceedings without evidence linking it to M/s. Millipore. The Tribunal found that this departure from the show-cause notice was unjustified, citing legal precedents that prevent new cases being made beyond the notice's scope. Additionally, the onus of proving brand ownership lay with the Department, and as the claim of joint ownership was unchallenged, and no evidence linked the brand name to M/s. Millipore, the Tribunal ruled in favor of the appellants, setting aside the impugned orders and allowing the appeals.