2017 (2) TMI 983 - AT - Central Excise

Tribunal upholds decision on brand name exemption, dismissing Revenue's appeal.

The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals) decision that 'Calfix Grade-A-Technical' was not the respondent ... SSI Exemption - whether the respondent Mercury (International) Pvt. Ltd. have manufactured and cleared goods of brand name of another and thus have wrongly claimed SSI exemption? - Held that: - Calfix Grade-A-Technical , could not be held as the brand name of EIPL and clearances effected by MIPL, merit SSI exemption, if otherwise admissible. - decided against Revenue. Issues:Whether the respondent company wrongly claimed SSI exemption by manufacturing and clearing goods under the brand name of another company.Analysis:The issue in question revolved around whether the respondent company manufactured and cleared goods under the brand name of another company, thus incorrectly claiming SSI exemption. The show-cause notice alleged that the respondent company was using the brand name 'Calfix' belonging to another company for their products. The Revenue contended that the respondent was not entitled to SSI exemption due to this practice. The Additional Commissioner confirmed the duty with penalties on the respondent company, along with penalties on the common director of both companies. The Commissioner (Appeals) later allowed the appeals, stating that 'Calfix Grade-A' was a descriptive nomenclature and not a brand name. The issue was whether 'Calfix Grade-A' qualified as a brand name under the relevant notification for the SSI exemption.Regarding the clearances of chemicals under the alleged brand name, the Revenue relied on statements of employees of the respondent company to support their demand. However, the respondent denied that 'Calfix Grade-A' was their brand name. The Director of the company also denied this in a written statement. The Commissioner (Appeals) noted that no evidence was presented by the Revenue to prove that 'Calfix Grade-A' was the brand name of the respondent. The Director's statement under the Central Excise Act was deemed more credible unless proven otherwise. The respondent clarified that 'Calfix' was a nomenclature for a water treatment chemical supplied by various vendors to government organizations. As the Revenue failed to prove that 'Calfix Grade-A' was the brand of the respondent, and no evidence showed that the exemption limit was exceeded, the demand for duty and interest was deemed not maintainable.In the appeal, the Revenue argued that the Commissioner (Appeals) incorrectly held that 'Calfix Grade-A-Technical' was not the brand name of the company, thus making them eligible for SSI exemption. The Revenue contended that the respondent was manufacturing and clearing goods under the brand name 'Calfix,' which belonged to another company. However, the Tribunal found no errors in the Commissioner (Appeals) order, neither in the factual findings nor the legal aspects. Consequently, the appeals filed by the Revenue were dismissed, and the respondents were entitled to consequential benefits as per the law.