2003 (5) TMI 172 - AT - Central Excise

Tribunal rules brand name assignment invalid, denies SSI exemption. Commissioner's jurisdiction upheld. Duty recalculated.

The Tribunal ruled against M/s. AVA Engineering Company, finding that the Deed of Assignment for the brand name 'Varuna' was not proven valid. The ... SSI exemption - Brand name - Appeal to Tribunal - Demand - Recomputation of Issues involved:- Whether the goods manufactured bear the brand name of another person affecting duty exemption eligibility.Analysis:1. The main issue in the appeals by M/s. AVA Engineering Company is whether the goods they manufacture are exempt from duty payment despite bearing the brand name 'Varuna' belonging to another entity. The appellant claims that they acquired the right to use the brand name through an agreement and subsequent assignment, making them eligible for the Small Scale Industries (SSI) exemption under Notification No. 1/93-C.E.2. The appellant's advocate argued that the brand name 'Varuna' was transferred to them through a Deed of Assignment dated 10-9-86, allowing them to use it exclusively on their products. They emphasized that the benefit of SSI exemption should apply from the date of assignment, not the registration date. The advocate cited relevant legal precedents to support their case.3. The advocate further contended that the goods manufactured by the appellant and the original brand owner are different, citing a decision that exemption can only be denied if the brand owner also produces the same goods. They also argued for duty calculation based on cum-duty-price and challenged the jurisdiction of the Commissioner under Section 35E of the Central Excise Act.4. The Revenue countered by stating that the brand name 'Varuna' was registered to another entity, and the appellant's use of the brand was based on a permission agreement, not a valid Deed of Assignment. They referenced legal cases to argue against the validity of the assignment and highlighted that the appellant did not mention the assignment in their statements or replies to show cause notices.5. The Tribunal found merit in the Revenue's argument, noting discrepancies in the appellant's claims regarding the Deed of Assignment. The Tribunal observed that the assignment was not mentioned during official visits or initial responses to notices, casting doubt on its authenticity. As the brand name remained registered to the original owner until a later date, the appellant was deemed ineligible for SSI exemption before the registration change. The Tribunal also addressed the duty calculation issue and remanded the matter for re-computation by the adjudicating authority.6. In conclusion, the Tribunal ruled against the appellant, finding that the Deed of Assignment was not proven to be valid, and the brand name registration change did not occur as claimed. The Tribunal also dismissed the challenge to the Commissioner's jurisdiction and directed a re-calculation of duty payable based on the provided directions.