2017 (10) TMI 1107 - AT - Central Excise

Appellate Tribunal allows appeal, remands matter on turnover clubbing issue for fair adjudication

The Appellate Tribunal CESTAT NEW DELHI allowed the appeal by the assessee-Appellants, a Proprietary Firm, remanding the matter to the original authority ... SSI Exemption - use of brand names - case of appellant is that the brand names were owned by the wife of Shri Mahesh Chand Goyal, Karta of the family and Shri Sundeep Kumar Goyal. This was a family settlement - Held that: - From the ratio laid down by the Hon’ble Supreme Court in the case of CCE vs Minimax Industries, [2011 (1) TMI 782 - DELHI HIGH COURT], it is evident that the brand name can be utilized by the family members. However, regarding the turnover of the two units, which were engaged in the manufacture, it is not clear from the record whether it was clubbed or not. For this limited purpose i.e. clubbing of the turnover of the two units, the matter remanded to the original authority to decide the same de novo. Appeal allowed by way of remand. Issues:Denial of SSI exemption based on ownership of brand names by family members and non-clubbing of income from two manufacturing units.Analysis:1. Denial of SSI Exemption:The appeal was filed against the Order-in-Appeal denying the SSI exemption to the assessee-Appellants, a Proprietary Firm, for the period 2009-10 to 2013-14. The assessee-Appellants were engaged in manufacturing wires and cables under different brand names owned by family members. The Department conducted a search and based on the material, denied the SSI exemption. The counsel for the assessee-Appellants argued that the brand names were part of a family settlement and relied on legal precedents like the case of Anil Pumps (P) Ltd. vs CCE, Panchkula, to support their claim. The counsel contended that the brand names did not belong to outsiders and were used interchangeably among family members. The Tribunal referred to the Supreme Court's decision in Commissioner vs Anil Pumps (P) Ltd. and the High Court's ruling in CCE vs Minimax Industries, highlighting that brand names can be utilized by family members. The Tribunal, therefore, allowed the appeal by remanding the matter to the original authority to determine if the turnover of the two manufacturing units was clubbed or not, providing the assessee-Appellants with an opportunity to present their case and submit additional documents if needed.2. Non-Clubbing of Income from Two Units:The issue of non-clubbing of income from two manufacturing units operated by family members was raised during the appeal. The Revenue argued that since the income of the two units was not clubbed, the denial of SSI exemption was justified. However, the Tribunal found that the record did not clearly indicate whether the turnover of the two units was clubbed or not. Citing the need for clarity on this matter, the Tribunal remanded the case to the original authority for a fresh decision. The Tribunal's decision to remand the case was based on the principle of providing a reasonable opportunity to the assessee-Appellants to present their case effectively and submit any additional documents as required by law. Consequently, the appeal was allowed for the limited purpose of resolving the clubbing issue, and the impugned order was modified accordingly.In conclusion, the judgment by the Appellate Tribunal CESTAT NEW DELHI addressed the issues of denial of SSI exemption based on brand ownership by family members and the non-clubbing of income from two manufacturing units. The decision highlighted the legal precedent allowing the use of brand names by family members and emphasized the need for clarity on the clubbing of turnover from the two units. The Tribunal's decision to remand the case for further review demonstrated a commitment to fair adjudication and providing parties with a fair opportunity to present their arguments and evidence.