2009 (9) TMI 345 - AT - Central Excise

Insignia on Goods as Brand Name Disqualifies Tax Benefit: Tribunal Rules

The Tribunal held that the insignia/monogram on goods constituted a brand name, disqualifying them from a tax benefit. It emphasized the connection ... SSI Exemption- Notification No. 8/98-C.E.dated 02.06.1998- The respondents manufacture medicines falling under Chapter Heading No. 30.03; when the officers visited the factory on 11-2-03, they found Oyximos-L/30vMI packed in cartons bearing batch no., manufacturing date and expiry date. The original authority held that the insignia/monogram affixed by the respondents on the packing of the goods cleared by them make the said goods as branded goods and that the brand names belong to M/s. OYSTER Lab Ltd./M/s. Focus Health Care Pvt. Ltd. and therefore they were not eligible for the benefit of Notification No. 8/98-C.E. dated 2-6-98. Accordingly, he confirmed the demand of Rs.20,828/- along with interest and imposed equal amount as penalty under Section 11AC read with Rule 173Q of CER, 1944. In the light of the decision of Commissioner of Central Excise, Trichy v. Grasim Industries Ltd. reported, in which Hon’ble Supreme Court held that “It is not necessary that the name or the writing must always be a brand name or trade name in the sense that it is normally understood. The exemption is only to such parties who do not associate their products with some other person held that- In the present case, it is clear that the names, the other details in the labels and the monograms/logo taken together clearly indicate a connection between the product and the company/firm which markets the product. This clearly amounts to use of brand name in terms of the explanation given in the notification itself for the said expression. In view of the above, we hold that the order of the Commissioner (Appeals) setting aside the order of demand of duty of Rs.20,128/- along with interest and setting aside the penalty of equal amount cannot be sustained. Therefore, we set aside the order of the Commissioner (Appeals) to the extent as above and the order of the original authority in this regard is restored. The appeal is disposed of in the above terms. Issues:Interpretation of the term 'brand name' in Notification No. 8/98-C.E.Determining whether the insignia/monogram on goods constitutes a brand name.Applicability of the judgment in the case of Grasim Industries Ltd. to the present case.Analysis:The case involved an appeal by the department against the Commissioner (Appeals) order in favor of the party, where the original authority had held that the insignia/monogram on goods made them branded goods, disqualifying them from the benefit of Notification No. 8/98-C.E. The Commissioner (Appeals) set aside this order, stating that the insignia did not identify the product with specific companies. The term 'brand name' was crucial, defined in the notification as a name or mark indicating a connection between the goods and a person. The department argued, citing the Supreme Court judgment in Commissioner of Central Excise v. Grasim Industries Ltd., that the insignia should be considered a brand name. However, the party relied on the Supreme Court decision in Astra Pharmaceuticals (P) Ltd. v. CCE, Chandigarh, where a mark on a container was not considered a brand name.The Tribunal analyzed the facts, noting that the product names and details on labels showed a connection between the product and marketing firms, indicating the use of a brand name. Referring to the Grasim Industries Ltd. judgment, the Tribunal emphasized that the connection must reflect on the manufacturing aspect and product quality. It concluded that the names, details, and monograms on the labels established a clear link between the product and marketing companies, constituting the use of a brand name as per the notification's explanation. Therefore, the Tribunal held that the Commissioner (Appeals) erred in setting aside the demand of duty, interest, and penalty, restoring the original authority's order.In summary, the Tribunal's decision hinged on interpreting the term 'brand name' in the context of the notification, considering the connection between the product and marketing firms through insignia and details on labels. Drawing parallels with relevant Supreme Court judgments, the Tribunal emphasized the significance of this connection in determining the presence of a brand name, ultimately ruling in favor of the department and restoring the original authority's order regarding duty, interest, and penalty.