2017 (10) TMI 343 - AT - Central Excise

Appeal Granted: Brand Name Shared Among Family-Owned Units, Entitled to SSI Exemption

M/s. Priya Plastics Versus The Commissioner of Central Excise (Appeals)

The Tribunal allowed the appeal by M/s. Priya Plastics, setting aside the duty demand and penalty sustained by the Order-in-Appeal. It was determined that ... SSI Exemption - use of brand name shared by three units - The Department's main plea is that the brand name Priya Polymers-South India is embossed on the bottom of the items manufactured by the appellant and this brand name belongs to other unit viz., M/s. Priya Polymers which is a partnership firm having partners Smt. Valsa and her husband Shri K. J. Jose - Held that: - the appellant and other two units on record belong to same family. There is evidence on record to prove that the brand name/inscription Priya Polymers-South India is not registered as brand name by the other unit viz., M/s. Priya Polymers though the wordings Priya Polymers are part of the brand name/inscription - Considering the Hon’ble Delhi High Court's decision in the case of CCE vs. Minimax Industries [2011 (1) TMI 782 - DELHI HIGH COURT], it appears that as per the facts on record, the said brand name Priya Polymers-South India cannot be called as an exclusive brand name of other unit viz., M/s. Priya Polymers. The facts indicate that the subject brand name can be said to belong to all the three units, which are owned by one family only - appeal allowed - decided in favor of appellant. Issues:Appeal against duty demand and penalty sustained by the Order-in-Appeal, brand name usage on plastic mugs, eligibility for SSI exemption, limitation period for demand, family-owned units, independent registration, applicability of Notification No.8/2003, dispute over brand name ownership.Analysis:The appellant, M/s. Priya Plastics, appealed against the duty demand and penalty sustained by the Order-in-Appeal, where the duty demand of Rs. 1,37,556/- along with equivalent penalty was upheld. The dispute arose from the allegation that the appellant manufactured plastic mugs bearing the brand name of another person, Priya Polymers, and cleared them without following Central Excise procedures. The Department contended that as the appellant used the brand name of another person on the plastic mugs, they were liable to pay duty for the clearances made during a specific period. The show-cause notice issued by the Department demanded duty of Rs. 1,59,565/-, which was confirmed by the Assistant Commissioner and sustained by the Commissioner (Appeals), leading to the appeal before the Tribunal.The main argument of the appellant was that all three units, including M/s. Priya Plastics and M/s. Priya Polymers, belonged to members of the same family. They contended that the brand name Priya Polymers - South India belonged to a family member and hence could not be considered as the brand name of another person for denying SSI exemption. The burden of proof was placed on the Department to establish that the brand name belonged to another person. The Department, on the other hand, argued that the duty and penalty were sustainable as the appellant used the brand name of another person, citing relevant legal precedents.After considering the facts and submissions from both sides, the Tribunal noted that all three units belonged to the same family. It was observed that the brand name in question was not registered exclusively by M/s. Priya Polymers and could be said to belong to all three units owned by the family. Citing legal decisions, including the Hon'ble Delhi High Court and the Supreme Court, the Tribunal concluded that the appellant was entitled to the benefit of Notification No.8/2003 as the brand name used could not be considered as belonging to another person. Therefore, the impugned order was set aside, and the appeal was allowed in favor of the appellant with consequential relief, if any.This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the legal reasoning leading to the Tribunal's decision in favor of the appellant.