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of <h1>Supreme Court affirms SSI unit's exemption despite trademark use</h1> The Supreme Court upheld the decision that the respondents were entitled to exemption as a Small Scale Industry (SSI) unit under Notification No. ... SSI exemption - N/N. 8/2003-C.E., dated 1st March 2003 - use of brand names belonging to others - documents to be placed to substantiate the plea. It is not understood why, information concerning registration of trademarks, which is in the public domain, could not be gathered by the Department and placed before the CESTAT. Permitting the Department to do so at this stage, nearly eight years after the issuance of the show cause notice, is justified? Held that: - The CESTAT has held that even if the affixing of a sticker to the footwear in question may amount to manufacture, the Respondents would nevertheless be entitled to exemption under the aforementioned notification as an SSI unit. This factual finding does not, in the considered view of the Court, give rise to any substantial question of law. This is irrespective of the preliminary objection of the Respondent on the maintainability of the present appeal on the ground that the issue arising from the impugned order of the CESTAT concerns payment of duty and, therefore, an appeal is maintainable only before the Supreme Court. Appeal dismissed. Issues:1. Eligibility for exemption as a Small Scale Industry under Notification No. 8/2003-C.E.2. Validity of show cause notice and order-in-original.3. Appeal before the Commissioner (Appeals) and findings.4. Appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) and grounds raised.5. Department's failure to substantiate claims regarding registered trademarks.6. Entitlement to exemption under the notification as an SSI unit.7. Substantial question of law arising from the CESTAT's order.8. Maintainability of the appeal before the Supreme Court.Analysis:1. The appellant contended that the respondents were ineligible for exemption as a Small Scale Industry (SSI) under Notification No. 8/2003-C.E. due to the use of registered trademarks by the units from which they procured products. The issue revolved around the authenticity of the documents showing the use of such trademarks and its impact on the eligibility criteria.2. The appeal stemmed from a show cause notice issued in 2008 and the subsequent order-in-original in 2009. The Commissioner (Appeals) allowed the appeal in 2010, emphasizing the department's burden to prove ownership of brand names used by others. The validity of the notice and the order was crucial in determining the subsequent legal proceedings.3. When the Department appealed to the CESTAT, no grounds were raised regarding the procurement of products from entities using registered trademarks. The failure to present relevant information at this stage, almost eight years after the notice, raised questions about the Department's diligence in gathering evidence to support its claims.4. The CESTAT's finding that the respondents would still be entitled to exemption as an SSI unit, even if affixing stickers to footwear constituted manufacture, was upheld. The court deemed this factual finding as not giving rise to any substantial question of law, despite objections raised by the respondents regarding the appeal's maintainability before the Supreme Court.5. The Department's inability to substantiate its claims regarding the use of registered trademarks by the suppliers raised concerns about the lack of timely and concrete evidence presented during the legal proceedings. The court highlighted the importance of providing relevant information at the appropriate stages of the case.6. Ultimately, the appeal and the application were dismissed, affirming the entitlement of the respondents to exemption under the notification as an SSI unit. The decision underscored the importance of meeting the eligibility criteria for such exemptions under the prevailing regulations.7. The judgment delved into the procedural and substantive aspects of the case, addressing the various legal arguments and findings at each stage of the appeal process. The analysis provided a comprehensive overview of the issues raised and the court's conclusions regarding the eligibility for exemption as an SSI unit under the relevant notification.8. The maintainability of the appeal before the Supreme Court was also discussed, emphasizing the grounds on which such appeals could be pursued and the limitations on appellate jurisdiction based on the nature of the issues involved. The judgment provided clarity on the appellate process and the scope of legal recourse available in similar cases.
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