2018 (4) TMI 534 - AT - Central Excise

Appellate Tribunal rules against small scale exemption for goods with others' brand name.

M/s Hutaib Aqua Versus C.C.E,C & S.T Hyderabad-III

The Appellate Tribunal CESTAT Hyderabad upheld the decision that the appellant was not eligible for the small scale exemption under notification No. ... SSI Exemption - use of Brand Name - case of revenue is that the appellant had manufactured processed mineral water in pet bottles with brand name 'RAMA'; while it is the case of the appellant that the brand name is not belonging to them and not anyone else - N/N. 8/2003-CE? - Held that: - the appellant herein, by a specific 'Buyer Seller Agreement' agreed to supply processed water bearing brand 'RAMA'; logo had to be embossed on the cap of the bottle and hologram stickers of the same brand has to be fixed on the bottles and the agreement provides that in the absence of these three requirements, the products would be treated has duplicate items by the purchasers. There is clear indication that the goods manufactured by the appellant had brand name of 'RAMA' which was not belonging to them - appeal dismissed - decided against appellant. Issues:Eligibility for small scale exemption under notification No. 8/2003-CE for manufacturing goods with a brand name of others.Analysis:The appeal before the Appellate Tribunal CESTAT Hyderabad revolved around the eligibility of the appellant for the benefit of small scale exemption under notification No. 8/2003-CE for the years 2004-2005 and 2005-2006. The central issue was whether the appellant, engaged in manufacturing processed mineral water in pet bottles bearing the brand name 'RAMA,' could avail the exemption despite not owning the brand. The revenue contended that the appellant manufactured goods with the brand name 'RAMA,' while the appellant argued that the brand did not belong to them or anyone else.Upon hearing both parties and examining the records, the Tribunal considered the definition of a 'brand or trade name' as outlined by the First Appellate Authority. The Tribunal noted that the appellant, through a specific 'Buyer Seller Agreement,' agreed to supply processed water bearing the brand 'RAMA,' with specific requirements such as embossing the logo on the bottle cap and affixing hologram stickers of the brand on the bottles. The agreement stipulated that non-compliance with these conditions would result in the products being treated as duplicates. The Tribunal concluded that these conditions were crucial, indicating that the goods manufactured by the appellant indeed bore the brand name 'RAMA,' which did not belong to them.The Tribunal found that the factual findings of the authorities were not effectively challenged by the appellant in the appeal. Consequently, the Tribunal upheld the impugned order, rejecting the appeal filed by the appellant. The operative part of the order was pronounced in court at the conclusion of the hearing. The decision reaffirmed that the appellant was not eligible for the small scale exemption under the given circumstances, as the goods manufactured by them carried a brand name not owned by them.