2008 (1) TMI 359 - HC - Central Excise

High Court directs Tribunal to reconsider case based on exemption notification interpretation

JEPIKA PAINTS Versus UNION OF INDIA

The High Court ruled in favor of the appellants, directing the Tribunal to reconsider the case for the period in question based on the provisions of the ... SSI exemption - Whether in view of clause 4 of notification No.1/93-C.E., exemption to a manufacturer as provided in the notification can be disallowed if the specified goods bear a brand name or trade name of another person although the proprietor of the brand name or trade name has assigned the same to the manufacturer – when it is held that there was assignment in favour of assessee, the mere fact that assignment was not registered could not alter the position Issues:1. Interpretation of Clause 4 of Notification No.1/93-C.E.2. Consideration of new ground by C.E.S.T.A.T.3. Validity of impugned order of the Tribunal.Interpretation of Clause 4 of Notification No.1/93-C.E.:The case involved the interpretation of Clause 4 of Notification No.1/93-C.E., which provided exemption for specified goods bearing a brand name or trade name of another person. The dispute centered around whether the appellant, a small scale industry, was entitled to exemption for sales made under the brand name 'Jepika,' which was assigned by another entity. The Tribunal initially ruled against the appellant, citing Clause 4 as prohibiting such sales. However, the appellant argued that the assignment of the brand name entitled them to its use and exemption. The Tribunal's decision was challenged based on the assignment agreement and the subsequent actions of the Commissioner Central Excise.Consideration of new ground by C.E.S.T.A.T.:Another issue raised was whether the C.E.S.T.A.T. could consider a new ground raised by the revenue, not mentioned in the show cause notice or adjudication order. The Tribunal remanded the matter to the Adjudicating Authority for further consideration, leaving the question of penalty open. The appellant contended that the Tribunal erred in segregating the period for considering exemption eligibility under the Notification.Validity of impugned order of the Tribunal:The validity of the impugned order of the Tribunal was questioned due to discrepancies regarding the assignment of the brand name 'Jepika.' The appellant argued that the Tribunal wrongly denied them exemption for a specific period, despite the assignment agreement executed earlier. The appellant relied on legal precedents to support their claim that the assignment of a brand name does not necessarily require registration under the Trade and Merchandise Marks Act, 1958.In conclusion, the High Court ruled in favor of the appellants, directing the Tribunal to reconsider the case for the period in question based on the provisions of the exemption notification and the arguments presented. The judgment highlighted the importance of interpreting Clause 4 of the notification in light of the assignment of brand names and the applicability of exemption provisions to small scale industries.