2014 (12) TMI 865 - HC - Central Excise

Tribunal denies exemption for goods lacking trade-related brand connection

Ratna Industries Versus The Customs, Excise & Service Tax Appellate Tribunal

Ratna Industries Versus The Customs, Excise & Service Tax Appellate Tribunal - 2015 (321) E.L.T. 131 (Mad.) Issues:1. Interpretation of benefit under Notification No.175/1986 CE2. Entertaining and passing orders on Order-in-Original No.72/19943. Determination of manufacturing and clearing branded goodsAnalysis:Issue 1: Interpretation of benefit under Notification No.175/1986 CEThe appellant, a manufacturer availing exemption under Notification No.175/86 as a small scale industry, faced allegations of wrongfully availing the benefit due to brand names of ineligible companies found on cleared goods. The Adjudicating Authority compared brand names on goods to those of other companies and denied exemption for some items. The Tribunal upheld this denial based on the connection between the appellant's brand names and those of other companies, emphasizing the significance of the brand name in trade. The Tribunal's decision was based on Explanation VIII of the Notification, which defines brand name/trade name and requires a connection between goods and a person using the name or mark, regardless of registration status. The Tribunal found the appellant's use of the brand name MARUTI indicated a connection with Maruti Udyog Ltd., justifying the denial of exemption.Issue 2: Entertaining and passing orders on Order-in-Original No.72/1994The Tribunal faced criticism for entertaining and deciding on Order-in-Original No.72/1994, despite the confirmation of findings by the first respondent. The Tribunal's decision was challenged by the appellant, arguing against a second adjudication due to the original order's components being upheld previously. However, the Tribunal justified its intervention based on the distinct issues related to different brand names and the Revenue's appeal against the exemption granted to the appellant under Notification No.175/86. The Tribunal's decision to disallow the benefit of exemption for the appellant under the Notification was upheld, emphasizing the need for a clear connection between the brand name used and another entity in trade.Issue 3: Determination of manufacturing and clearing branded goodsThe case revolved around the appellant's manufacturing and clearance of goods with brand names linked to other companies. The Adjudicating Authority compared brand names on goods to those of ineligible companies, leading to the denial of exemption for certain items. The Tribunal upheld this denial, emphasizing the importance of establishing a connection between the brand name used and another entity in trade. The Tribunal's decision was based on the interpretation of Explanation VIII of Notification No.175/86, which defines brand name/trade name and requires a clear indication of a connection between specified goods and the person using the name or mark. The Tribunal's decision to deny the benefit of exemption under the Notification for the appellant was upheld, highlighting the necessity for a trade-related connection in determining eligibility for exemption.In conclusion, the Tribunal's decision to deny the benefit of exemption under Notification No.175/86 for the appellant's goods bearing brand names connected to other companies was upheld, emphasizing the importance of establishing a trade-related connection through brand names in determining eligibility for exemption.