2015 (6) TMI 226 - SC - Central Excise

Court grants excise duty exemption to Small Scale Industrial Unit for 'Kalimark' Aerated Water brand

Kali Aerated Water Work, Salem Versus Commnr. of Central Excise, Madurai

The Court ruled in favor of the appellant, a Small Scale Industrial Unit, in a dispute over excise duty exemption for manufacturing Aerated Water under ... Exemption under Notification 1/93-CE dated 28.2.1993 - manufacture of Aerated Water under various brand names using the trade mark with the “Kalimark” / M/s.Kali Aerated Water Works” - Use of third party brand name - Held that:- Trade name 'Kalimark Aerated Water Works' and trade mark mentioned in the said agreement would remain vested in all the parties including the appellant and the appellant was also allowed to use the same. The agreement further provides that the user of this trade mark, therefore, shall not make any payment of royalty or remuneration to any other party. This very fact was correctly appreciated by the Commissioner who decided the appeal in favour of the appellant. - appellant has been using its own brand name 'Kalimark' and it belongs to the appellant. In view thereof, the case of the appellant is squarely covered in its favour by the judgment of this Court in Civil Appeal No.9157 of 2003 titled CCE, Hyderabad IV vs. Stangen Immuno Diagnostics [2015 (6) TMI 155 - SUPREME COURT OF INDIA] - Decided in favour of assessee. Issues:Exemption from excise duty for a Small Scale Industrial Unit manufacturing Aerated Water under a specific brand name. Interpretation of a family settlement regarding ownership of the brand name 'Kalimark' and its impact on excise duty exemption.Analysis:The appellant, a Small Scale Industrial Unit, sought exemption from excise duty for manufacturing Aerated Water under the brand name 'Kalimark'. The Department denied the exemption, claiming the brand name belonged to a third party. The Tribunal upheld this decision based on a family settlement indicating the brand name ownership transfer. However, the appellant argued that the settlement allowed all parties, including them, to use the brand name without royalty payment.The Court examined the family settlement's terms, which clarified the shared ownership of the brand name 'Kalimark' among the parties, including the appellant. The settlement explicitly stated that no royalty was payable, and the appellant had exclusive rights to the brand name within their marketing area. The Commissioner's order supported the appellant's ownership rights based on historical documents and the settlement's provisions.The Court concluded that the appellant rightfully owned the brand name 'Kalimark' and was entitled to the excise duty exemption. The judgment referenced a similar case to support the appellant's claim. Consequently, all appeals were disposed of in favor of the appellant.