2002 (11) TMI 186 - AT - Central Excise

Appeal denied for duty benefit on 'Sant' goods, duty recalculated, no penalties imposed.

The appeal was disposed of by holding that the goods manufactured by the appellants bearing the brand name 'Sant' are not eligible for the benefit of ... SSI Exemption - Brand name Issues Involved:1. Eligibility for exemption from payment of duty under Notification No. 1/93-C.E.2. Ownership and use of the brand name 'SANT.'3. Applicability of the Trade and Merchandise Marks Act, 1958.4. Determination of cum-duty price and penalty imposition.Issue-wise Detailed Analysis:1. Eligibility for Exemption from Payment of Duty under Notification No. 1/93-C.E.:The primary issue in this appeal is whether the excisable goods manufactured by the appellants are bearing the brand name of another person, rendering them ineligible for exemption from payment of duty under Notification No. 1/93-C.E., dated 28-2-1993. The Tribunal concluded that the goods manufactured by the appellants bear the brand name 'Sant,' which is a registered brand name of M/s. Sant Brass Metal Works. Despite the Dissolution Deed allowing the appellants to use the brand name 'Sant' for non-ISI grade cocks and valves, the Tribunal held that the brand name 'Sant' remains registered in the name of another person. Thus, the goods are not eligible for the exemption under Notification No. 1/93-C.E.2. Ownership and Use of the Brand Name 'SANT':The appellants argued that the Dissolution Deed assigned the use of the brand name 'Sant' to them for non-ISI grade cocks and valves. However, the Tribunal found that the Dissolution Deed did not confer ownership of the brand name to the appellants but merely allowed them to use it. The brand name 'Sant' remains registered in the name of another entity, which is sufficient to attract the mischief of Para 4 of the Notification No. 1/93-C.E.3. Applicability of the Trade and Merchandise Marks Act, 1958:The appellants cited various sections of the Trade and Merchandise Marks Act, 1958, including Sections 24, 30(1)(b), and 33, to argue that they have acquired ownership rights over the brand name 'Sant' due to long and uninterrupted use and acquiescence by the original owner. The Tribunal, however, held that these aspects are defenses in an action for infringement under the Trade and Merchandise Marks Act, 1958, and must be determined by the competent authority under the Act. There was no such determination, and the brand name 'Sant' was not registered in the name of the appellants.4. Determination of Cum-duty Price and Penalty Imposition:The Tribunal agreed with the appellants that the sale price should be considered as cum-duty price, as held by the Larger Bench in Sri Chakra Tyres Ltd. v. CCE. Therefore, the duty demand was to be recalculated by the Adjudicating Authority by taking the sale price as cum-duty price and allowing the deduction of excise duty. The Tribunal also set aside the penalty imposed on the appellants, noting that in 1992, the appellants were allowed the benefit of Notification No. 175/86-C.E.Conclusion:The appeal was disposed of by holding that the goods manufactured by the appellants bearing the brand name 'Sant' are not eligible for the benefit of Notification No. 1/93-C.E. The duty demand was to be recalculated considering the sale price as cum-duty price, and no penalty was imposed on the appellants.