2000 (6) TMI 57 - AT - Central Excise

Tribunal grants exemption to Eco Product India; emphasizes burden of proof in excise disputes

The Tribunal ruled in favor of M/s. Eco Product India P. Ltd., setting aside the decision that their excisable goods were ineligible for exemption under ... SSI Exemption - Brand-name - Ownership Issues:- Whether the excisable goods manufactured by M/s. Eco Product India P. Ltd. were cleared bearing the brand name of another person, affecting their eligibility for exemption under Notification No. 1/93 dated 28-2-1993.Analysis:The appeal filed by M/s. Eco Product India P. Ltd. raised the issue of whether their excisable goods, bearing the brand name 'Aquarious-II,' were considered ineligible for exemption under Notification No. 1/93. The dispute stemmed from a distributorship agreement with M/s. Singer India Ltd., where the Asst. Commissioner confirmed a demand against M/s. Eco Product India P. Ltd. based on the ownership of the brand name. The Commissioner (Appeals) upheld this decision, asserting that Singer India Ltd. owned the brand name. However, M/s. Eco Product India P. Ltd. argued that they owned the brand name, supported by their registration application and a no-objection certificate from Singer India Ltd. The burden of proof, as per precedent, lay on the department to establish the brand name's ownership, which they failed to do.The arguments presented by both sides revolved around the distributorship agreement's clauses, particularly clause 6, which detailed the use and ownership of the brand name 'Aquarious-II.' The department contended that the brand name belonged to Singer India Ltd. based on the agreement terms, emphasizing clause 6.6, which indicated the transfer of rights to Singer India Ltd. M/s. Eco Product India P. Ltd. countered by highlighting their registration application and the no-objection certificate, asserting their ownership of the brand name. The Tribunal noted that the department had not provided substantial evidence to prove Singer India Ltd.'s ownership of the brand name, ultimately setting aside the impugned order and allowing the appeal.The Tribunal's analysis delved into the distributorship agreement's clauses, particularly clause 6, which outlined the relationship between the parties regarding the brand name 'Aquarious-II.' Despite restrictions imposed on M/s. Eco Product India P. Ltd. regarding the brand name's use, the agreement did not conclusively establish Singer India Ltd.'s ownership. Notably, clause 6.6 indicated a transfer of the brand name to Singer India Ltd. post-termination, implying initial ownership by M/s. Eco Product India P. Ltd. The Tribunal highlighted the lack of evidence from the department supporting Singer India Ltd.'s ownership, emphasizing the importance of burden of proof in such cases. Ultimately, the Tribunal ruled in favor of M/s. Eco Product India P. Ltd., emphasizing the department's failure to substantiate their claim of ownership, leading to the appeal's success.