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of <h1>Tribunal Grants Duty Exemption for 'BONUS' Brand; Revises Penalty</h1> <h3>CONVERTECH EQUIPMENT PVT. LTD. Versus COMMISSIONER OF C. EX., MEERUT</h3> CONVERTECH EQUIPMENT PVT. LTD. Versus COMMISSIONER OF C. EX., MEERUT - 2001 (137) E.L.T. 144 (Tri. - Del.) Issues Involved:1. Entitlement to exemption under Notification No. 1/93-C.E.2. Ownership and use of the trade mark 'BONUS'.3. Invocation of extended period of limitation under Section 11A(1) of the Central Excise Act.4. Determination of assessable value and quantification of duty.Issue-wise Detailed Analysis:1. Entitlement to Exemption under Notification No. 1/93-C.E.The appellants claimed exemption from licensing control under Notification No. 1/93-C.E., asserting they were an SSI unit with clearance value below the prescribed limits. They argued that the trade mark 'BONUS' was their own, supported by an Assignment Deed dated 22-11-1993 from M/s. Ecograph A.G., Switzerland. The Department, however, contended that the appellants used a trade mark belonging to another person (the Swiss company), disqualifying them from exemption under para 4 of the notification.2. Ownership and Use of the Trade Mark 'BONUS'The appellants argued they acquired ownership of the trade mark 'BONUS' in India from 26-4-1993, as per the Assignment Deed, and registered it in their name on 11-3-1994. They cited the Calcutta High Court's decision in ESBI Transmission Pvt. Ltd. v. CCE, supporting their claim of ownership. The Department countered that the appellants only obtained the right to use the trade mark, not ownership, thus invoking para 4 of the notification against them.3. Invocation of Extended Period of Limitation under Section 11A(1)The Department issued a show-cause notice alleging suppression of facts and misdeclaration by the appellants, invoking the extended period of limitation for demanding duty from November 1993 to 29-9-1994. The appellants contested this, arguing they had disclosed all relevant information, including the use of the trade mark 'BONUS' and their joint venture status with the Swiss company.4. Determination of Assessable Value and Quantification of DutyThe appellants contended that the sale price should be treated as cum-duty price, and the value of exported goods should be deducted from the total clearance value for duty calculation. The adjudicating authority had not properly considered these submissions, necessitating a fresh evaluation.Judgment Summary:Entitlement to Exemption:The Tribunal concluded that, from 11-3-1994, the appellants were the owners of the trade mark 'BONUS' for purposes of para 4 of Notification No. 1/93-C.E., and thus entitled to exemption from duty for goods cleared under the 'BONUS' brand name from 11-3-1994 to 29-9-1994. The demand for duty on goods cleared during this period was deemed illegal.Ownership and Use of Trade Mark:The Tribunal found that, by virtue of the Assignment Deed and subsequent registration, the appellants had exclusive rights to the trade mark 'BONUS' in India from 11-3-1994. This ownership was recognized under Indian law, providing them protection against infringement and validating their claim for exemption under Notification No. 1/93-C.E.Extended Period of Limitation:For the period prior to 11-3-1994, the Tribunal upheld the Department's demand for duty, as the appellants had not established ownership of the trade mark and were using a brand name owned by the Swiss company. The Tribunal also upheld the invocation of the extended period of limitation, as the appellants failed to rebut the allegation of suppression for this period.Assessable Value and Duty Quantification:The Tribunal directed the Commissioner to re-evaluate the assessable value and duty quantification, considering the appellants' submissions regarding cum-duty pricing and exclusion of exported goods' value.Penalty:The penalty imposed on the appellants was reduced to Rs. 5000/- in light of the findings on the merits of the case.Conclusion:The appeal was disposed of with directions to set aside the duty demand for the period from 11-3-1994 to 29-9-1994, and to re-quantify the duty for the period prior to 11-3-1994, considering the appellants' submissions on assessable value. The penalty was reduced accordingly.
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