2009 (9) TMI 452 - AT - Central Excise

Appellants granted exemption as goods lacked foreign brand, only used part of Indian name for warranty

The Tribunal held the appellants eligible for small scale exemption, as the goods supplied did not bear the foreign supplier's brand name/trade-name, only ... SSI Exemption- brand name of another- The appellants states that the impugned goods which were supplied to a public sector undertaking, namely BSNL did not have any brand name/trade name. The appellant had a collaboration agreement with M/s Pouyet International, France but the appellants have not used brand/trade name of the appellant company. In the light of the decision of of CCE, Trichy v. Rukmani Pakkiwell Traders held that- All that has been used is only a part of the Indian company’s name to indicate the parts manufactured by them. In view of the above, we are of the view that the appellants are not be disentitled to the small scale exemption. Accordingly, we set aside the impugned order and restore the Order-in-Original. The appeals are allowed. Issues:1. Eligibility for small scale exemption based on the use of brand name/trade-name on supplied goods.Analysis:The appellant claimed eligibility for small scale exemption arguing that the goods supplied to a public sector undertaking did not bear any brand name/trade-name, but only a part of the appellant-company's name for warranty identification. The appellant cited two Tribunal decisions in support. The JCDR contended that the foreign supplier's name was used on the goods, leading to denial of exemption based on the Namtech Systems Ltd. case and a Supreme Court decision. The Tribunal noted the Supreme Court's Explanation IX emphasizing that even the use of a part of a brand name or trade-name indicating a connection in trade could disqualify from exemption. However, the Tribunal found no evidence of the foreign supplier's brand name or trade-name and accepted the appellant's argument that neither the foreign supplier nor the Indian manufacturers had a brand name or trade-name. Consequently, the Tribunal held the appellants eligible for the small scale exemption, setting aside the impugned order and restoring the Order-in-Original.In conclusion, the Tribunal allowed the appeals, emphasizing that the use of a part of the Indian company's name to identify manufactured parts did not disentitle the appellants from the small scale exemption. The decision was based on the absence of evidence regarding the foreign supplier's brand name or trade-name and the lack of such identification for both the foreign and Indian entities involved in the transaction.