2016 (3) TMI 264 - AT - Central Excise

Tribunal Upholds Denial of Exemption for Unauthorized Brand Use

The Tribunal upheld the original order denying exemption to the appellants for manufacturing and clearing goods with brand names not owned by them, making ... SSI Exemption - Manufacture and clearing dutiable goods with the brand name or trade name of another person - denial of exemption under Notification No. 1/1993-CE (NT) dated 28/3/1993, as amended - Held that:- The Managing Director of the appellant company had confirmed that they have been clearing hubs and drums which is further confirmed from the balance sheet for the relevant period. The fact has been confirmed further by the statement of the Production Supervisor. These were corroborated by the customers who purchased these finished branded goods. The affidavits of retraction filed after almost 1= years are clearly an afterthought. The case of the Revenue is not only based on the statements. There were physical seizure and independent corroboration including statements of the customers and the bills which covered the clearances. The impugned order examined all these issues in detail. The learned Commissioner examined all the evidences and came to the conclusion that the appellants have cleared during the impugned period goods with brand name which was not owned by them and as such are liable to Central Excise duty as SSI exemption will not be available to them. We find in the present appeal, the appellant is not able to bring in any point for consideration to interfere with the impugned order. Regarding the communication received from Trade Marks Registry, it is to be noted that the same is regarding the application of Section 9 of the Trade Marks Act, 1999 for the purpose of registration. As mentioned above, for denial of exemption the brand name or trade name has a wider connotation, registration being not mandatory. We find no merit in the present appeal and as such dismiss the same. Issues:1. Denial of exemption under Notification No. 1/1993-CE (NT) dated 28/3/1993.2. Interpretation of 'brand name' or 'trade name' under para 4 of the notification.3. Allegation of manufacturing and clearance of dutiable goods with another person's brand name.4. Consideration of house marks for identification purposes.5. Evidence presented by both parties regarding the ownership of brand names.6. Application of Section 9 of the Trade Marks Act, 1999 in determining brand names.Analysis:1. The case involved the denial of exemption under Notification No. 1/1993-CE (NT) dated 28/3/1993 to the appellants engaged in manufacturing brake drums, hubs, trolley drums, and castings thereof. The issue arose when verification revealed machined pieces with brand names other than the appellants' own 'KFMW.'2. The interpretation of 'brand name' or 'trade name' under para 4 of the notification was crucial. The definition included any name or mark used in relation to specified goods to indicate a connection in trade with a person, whether registered or not. The Tribunal analyzed this definition in the context of the appellants' case.3. The allegation against the appellants was that they manufactured and cleared dutiable goods using brand names of other persons. This was supported by physical evidence, statements of company officials, and customer testimonies, indicating the use of different brand names like 'B Gwalior' and 'National Gwalior' on the products.4. The appellants argued that names like 'National,' 'Goodwill,' 'NEW,' 'NEC,' and 'BEW' were house marks for identification purposes and not brand names of other persons. They contended that the Department failed to establish their use of others' brand names.5. Both parties presented evidence regarding the ownership and usage of brand names. The appellants submitted communication from the Trade Marks Registry regarding the capability of distinguishing goods/services under Section 9 of the Trade Marks Act, 1999. However, the Tribunal found this communication insufficient to disprove the use of brand names.6. The application of Section 9 of the Trade Marks Act, 1999 was considered in determining brand names for the purpose of denial of exemption. The Tribunal emphasized that registration was not mandatory for a name to qualify as a brand name or trade name under the notification, broadening the scope of what constitutes a brand name.In conclusion, after thorough examination of the evidence and legal provisions, the Tribunal upheld the original order denying exemption to the appellants. The decision was based on the finding that the appellants had indeed cleared goods with brand names not owned by them, making them liable for Central Excise duty. The Tribunal dismissed the appeal, stating that the appellants failed to provide sufficient grounds for challenging the impugned order.