TaxTMI 
TaxTMI 
2010 (7) TMI 465
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....le for such benefit. Para 4 of each of the other two notifications created an identical bar against SSI benefit in respect of goods affixed with another person's brand name. After investigations into the clearances made by the assessee during the material period, the department issued a show-cause notice alleging that the goods cleared under the brand name 'Avance' during the aforesaid period were not eligible for SSI benefit under the above notifications inasmuch as the brand name was owned by another company, namely, Capital Controls Company Inc., USA. The show-cause notice, accordingly, demanded differential duty from the assessee by invoking the extended period of limitation under the proviso to sub-section (1) of Section 11A of the Central Excise Act. It also proposed a penalty on the assessee under Section 11AC of the Act on the same grounds on which the proviso ibid was invoked. The notice also sought to penalise the Managing Director of the company. The demand of duty and other proposals in the show-cause notice were contested. In adjudication of the dispute, the original authority confirmed demand of duty of over Rs. 9.5 lakhs against the assessee and appropriated an earli....
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....vited our attention to some of the provisions of the Trade Mark Registered User Agreement dated16-11-1995. The recitals of this agreement indicate that the Licensor was the registered owner of the Trade Marks mentioned in the schedule to the agreement. Incidentally, 'Advance' is one of the scheduled trade marks. The schedule to the agreement also indicates that the said trade mark was registered in the name of the Licensor in the year 1984. It further appears from the recitals of this agreement that the Licensor proposed to grant to the User, permission to use the trade mark inIndiasubject to the terms and conditions set forth in the agreement. Clause 2 of the agreement provided that the Licensor granted to the User the non-exclusive right to use the trade mark upon or in relation to the goods inIndiaas a registered user of the trade mark. Clause 2 further provided that the Licensor or its subsidiaries or affiliates retained the right to use the trade mark inIndia. The agreement also provided for a joint application to be made by the Licensor and the User to the Registrar of Trade Marks inIndiaunder the Trade and Merchandise Marks Act, 1958 for the purpose of securing the recording....
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....emption in respect of such clearances. The Hon'ble Supreme Court rejected this claim by holding that the above clearances of goods under brand name 'SANT' were hit by para 4 of Notification No. 1/93-C.E. (which is pari materia with para 5 of Notification No. 8/99-C.E. and para 4 of each of the other two notifications involved in this case). Their Lordships held so after noting that the brand name 'SANT' continued to be registered in the name of M/s. Sant Brass Metal Works. On the strength of this decision of the Supreme Court, the learned JDR has argued that only ownership of trade mark/brand name is decisive for an SSI unit in the context of claiming exemption under the relevant notification. It is submitted that, in the instant case, there is no evidence of ownership of brand name 'Advance' having been acquired by the assessee at any point of time. The learned JDR has also claimed support from the Tribunal's Larger Bench decision in Namtech Systems Ltd. v. Commissioner - 2000 (115) E.L.T. 238 (Tribunal-LB) wherein it was held that the benefit of SSI notification was not available to specified goods affixed with brand name/trade name of a foreign person or of a trader who was not ....
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....rand name 'Advance' from them. However, the show-cause notice for recovery of duty by invoking the extended period of limitation was issued as late as on28-3-2002. According to the learned counsel, all the relevant information was available to the department during the period of dispute and, therefore, there is no justification for them to invoke the extended period of limitation. Learned counsel further submits that, on the question whether specified goods affixed with a foreigner's brand name could claim SSI benefit without the bar created in para 7 of Notification No. 175/86-C.E., para 4 of Notification No. 1/93-C.E. or similar provision of successor-notifications, there were conflicting decisions of this Tribunal. It was this conflict which was resolved by the Tribunal's Larger Bench in the case of Namtech Systems Ltd. (supra). Considering the conflicting decisions, the learned counsel submits that the assessee cannot be alleged to have indulged in suppression of facts or the like with intent to evade payment of duty. 6. We have given careful consideration to the submissions. As we have already noted, the assessee complained to the Hon'ble High Court that the earlier fi....
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....ufacturing inIndiaany goods bearing the brand name during the tenure of the agreement. To a query from the Bench as to why this relaxation under Clause 19 was not given to the assessee in respect of other brand names/trade marks mentioned in the schedule to the agreement, the answer is that the other brand names/trade marks were not actually used by the assessee. From the clarificatory clause introduced on9-1-1996, it appears to our mind that it was intended to make the existing provisions (pertaining to trade marks) redundant. The word assignment or its other variants were not to be found in the original agreement. The word 'assigned' was introduced through Clause 19. Therefore, the purpose of Clause 19 ibid was to incorporate the concept of 'assignment' into the text of the agreement so as to make it suitable for SSI-related transactions. It is significant to note that, even in Clause 19, the Licensor agreed not to assign the brand name to any other person inIndiaduring the tenure of the agreement. Further, he also undertook not to manufacture inIndiaany goods bearing the brand name during the tenure of the agreement. Such a provision would presuppose that the essential elements ....
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....stant case, obviously, the brand name 'Advance' should be considered to have been registered in the name of the assessee from 18-8-1999 and, therefore, the clearances effected by them from that date will not be hit by the bar created in para 5 of Notification 8/98-C.E. or para 4 of any of the other two Notifications. However, for the period prior to18-8-1999, the assessee cannot claim the benefit, having regard to the relevant provisions of the Trade Mark Registered User Agreement dated16-11-1995(as amended by the supplement agreement dated9-1-1996). These provisions of the agreement, as we have already noted, would go to show that any absolute right over the brand name was not transferred or assigned by the Licensor to the assessee. Therefore, the respondent cannot claim SSI benefit on the strength of the said agreement, though they can claim the benefit on the strength of the certificate of registration. It is ordered accordingly. 8. The following are the decisions particularly cited by the learned counsel, in support of the assessee's contention that the brand name 'Advance' had been duly assigned to them by the US company and, therefore, their claim for SSI benefit unde....
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....se, assignment of exclusive right itself is in dispute. In the case of Primella Sanitary Products (supra), the brand name was found to have been assigned to the assessee for a valued consideration and on this basis, it was held that that the assessee was entitled to the benefit of Notification Nos. 175/86-C.E. and 1/93-C.E. In the present case, even the assessee has not claimed that they have obtained an assignment of brand name against payment of any consideration. As a matter of fact, the agreement dated16-11-1995did not provide for payment of any consideration by the assessee to the Licensor for the right to use brand name. In the case of Bigen Industries (supra), the Hon'ble Supreme Court upheld the Tribunal's decision holding that the assessee was the sole proprietor of the trade mark for theterritoryofIndiaas recognised by the Trade Marks Registry and hence they were not barred from claiming SSI benefit under Notification 140/83-C.E. In the present case, we have already given the benefit of similar registration of brand name 'Advance' to the assessee-respondent. In the case of Damnet Chemicals (supra), again, the Hon'ble Supreme Court was granting the benefit of registration ....