1999 (10) TMI 758 - AT - Central Excise

Electric Meter Manufacturer Loses Appeal Over Central Excise Duty and Penalty

The appellant, M/s. Elymer Havells Electrics, manufactured electric meters affixed with the brand name 'Elymer Havells.' The Collector demanded Central ... Benefit of Notification No. 175/86 - affixing brand name of another person - connection in the course of trade - common trade mark/brand name - extended period of limitationBenefit of Notification No. 175/86 - affixing brand name of another person - connection in the course of trade - Whether the appellants were affixing on their excisable goods the brand name of another person so as to disentitle them from the benefit of Notification No. 175/86. - HELD THAT: - The Tribunal accepted the finding of the Collector that the appellants affixed the brand name 'Havell's' (as part of 'Elymer Havells') on their electric meters and that the pictorial representation and use gave an impression of a close commercial connection with the brand owner. Differences in presentation (absence of certain words, rectangular framing) were held not to negate the connection in the course of trade. Reliance on decisions holding that the mark must be 'same' in other contexts was rejected as distinguishable; the Tribunal followed authorities holding that use of another's brand name, even on different products, can attract disqualification from the notification. The Tribunal further noted uncontested evidence that the appellants paid the brand owner for use of the name, reinforcing the connection. Applying Explanation VIII to the notification, the use indicated a connection between the goods and the brand owner and therefore disentitled the appellants from the exemption. [Paras 7, 9]Appeal rejected on the ground that appellants used the brand name of another and were not eligible for the benefit of Notification No. 175/86.Extended period of limitation - affixing brand name of another person - Whether the extended period of limitation for demand could be invoked by the Revenue. - HELD THAT: - The Tribunal held that the extended period was invokable because the appellants did not disclose to the Department that they were affixing the brand name of Havell's on their products. A party's incidental references (such as a letter identifying authorised signatories or mention in returns) were held insufficient to constitute disclosure that would preclude extended limitation. Consequently, the longer limitation period for raising demand applied. [Paras 9]Extended period of limitation held invokable; denial of exemption not time-barred.Final Conclusion: The appeal is dismissed: the appellants were held to have used the brand name of another in a manner indicating a commercial connection and therefore were not entitled to the exemption under Notification No. 175/86; the Revenue could invoke the extended period of limitation. Issues:1. Whether the appellant was affixing excisable goods with the brand name of other persons affecting eligibility for Notification No. 175/86-CE dated 1.3.1986.Analysis:The appeal involved M/s. Elymer Havells Electrics manufacturing electric meters affixed with the brand name 'Elymer Havells.' The Collector confirmed a demand for Central Excise duty and imposed a penalty, alleging the goods were not eligible for the benefit of Notification No. 175/86. The appellant argued the brand was established since 1981, unregistered, and not related to electric meters. They cited precedents like Taj Serpent Eggs Factory case to support their claim that using a different brand name does not disqualify them from the notification's benefit.The appellant contended that the mere presence of a marketing company's logo on packaging does not affect eligibility for the notification. They emphasized the differences in brand presentation and argued against penalty imposition. The appellant also challenged the invocation of a larger limitation period, citing departmental awareness of their brand usage and continuity in operations post-notification amendment.The opposing view highlighted the Supreme Court's stance on preventing ineligible manufacturers from benefiting through indirect means. They pointed out the appellant's association with Havell's Group and payments for brand usage, indicating a connection in the course of trade. The argument relied on Explanation VIII to Notification No. 175/86, defining brand/trade names and emphasizing the recognizable connection between the appellant's goods and the brand owner.The judgment observed the close association between the appellant's goods and the brand owner based on visual representation and payment for brand usage. It rejected the appellant's arguments on brand name differences and product dissimilarity, aligning with the Revenue's position. Citing relevant precedents like Bell Products case and Intercity Cable Systems, the judgment concluded that the appellant was not eligible for the notification's exemption. The decision also upheld the invocation of an extended limitation period due to the appellant's failure to disclose brand affixation to the Department, ultimately dismissing the appeal.