2007 (10) TMI 154 - AT - Central Excise

Appellants granted SSI exemption for using foreign brand name on products clarifying collaboration vs brand inscription

BHORUKA GOLDHOFER TRAILERS PVT. LTD. Versus COMMR. OF C. EX.

BHORUKA GOLDHOFER TRAILERS PVT. LTD. Versus COMMR. OF C. EX. - 2008 (223) E.L.T. 97 (Tri. - Chennai) Issues:Interpretation of brand name for claiming SSI exemption under Notification No.175/86-CE and No.1/93-CE.Analysis:The case involved the appellants, engaged in manufacturing trailers and transport equipment, claiming SSI exemption under Notifications No.175/86-CE and No.1/93-CE. The dispute arose as the appellants affixed labels on their products highlighting the word 'Goldhofer' in collaboration with a German company. The Revenue contended that by using the foreign company's brand name, the appellants were not entitled to SSI benefit under the Notifications. Show-cause notices were issued for duty recovery, resulting in demands and penalties imposed by the authorities.The Collector of Central Excise held that the appellants were not entitled to the exemption as the brand name 'Goldhofer' on the products linked them to the foreign company, thus disqualifying them from SSI benefits. However, the Tribunal disagreed with this finding. It noted that the word 'Goldhofer' was part of the appellant-company's name and the collaboration agreement required mentioning the foreign company's name on the product label. The Tribunal emphasized that the intention was to indicate manufacturing under license from the German company, not to establish a brand connection.Referring to precedents like Weigand India (P) Ltd. and Prestige Counting Instruments P. Ltd., the Tribunal highlighted that mere collaboration inscriptions did not constitute using a foreign brand name. The Tribunal also cited cases like Esprit Switchgear Pvt. Ltd. and Rajdoot Paints Ltd., where similar collaborations did not disqualify the assessees from SSI benefits. Relying on this case law, the Tribunal concluded that the appellants were eligible for the SSI exemption under the Notifications, setting aside the impugned orders and allowing the appeals on merits.In conclusion, the Tribunal's decision clarified the interpretation of brand name for claiming SSI exemption under the relevant Notifications. By analyzing the collaboration agreement, product labels, and legal precedents, the Tribunal determined that the appellants were entitled to the exemption despite highlighting the foreign company's name on their products. The judgment emphasized the distinction between indicating collaboration and using a brand name, ensuring consistent application of SSI benefits in similar cases.