TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 372
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.... appellants had been marketed under brand names that did not belong to them. Accordingly, notices were issued for denial of benefit of exemption and the four were asked to show cause against proceedings for recovery of Rs. 4,07,666/-, Rs. 1,09,03/-, Rs. 47,036/- and Rs. 12,14,502/- respectively from M/s Cannon Trade Link, M/s Charms Creation, M/s Poonam Perfect and M/s Ankit Apparels. Original authority dropped proceedings but first appellate authority allowed the appeals of Revenue. Hence, appellants are before us. 3. Allegedly, the 'ready-made garments' manufactured by the appellants bear the brands 'CANNON', 'CHARMS', 'CHOCKLATE' etc which admittedly, also belong to other persons and the original authority had taken the stand that these brands were registered for manufacture of 'knitted garments' falling under chapter 61 of the First Schedule of the Central Excise Tariff Act, 1985 whereas the appellant manufacture 'woven garments.' The impugned order takes note that the brands are registered under class 25 of the fourth schedule of the Trade and Merchandise Marks Rules, 1999 which covers all manner of clothing and that the decision of the Hon'ble Supreme Court in Commissioner o....
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....ot allege the connection that has been elaborated in this judgment and, hence, their claim to relief on the basis of this judgment cannot be denied. It is also submitted that, other than a search report showing ownership of these brands with some persons or entities, there is no allegation of any financial relationship that can reveal intent to take advantage of the brands. 5. We have heard Learned Counsel for appellants and Learned Authorized Representative. There is no dispute that the impugned brand names are registered with various individuals. It is also the claim of the appellants that, as far as they are concerned, these brand names were registered, or such registration had been applied for, by certain persons known to them and these persons had assigned the brands to them. 6. We observe from the records that original authority had relied upon a decision of the Tribunal to drop proceedings. The decision in Commissioner of Central Excise, Chandigarh v. Fine Industries [20012 (53) RLT 398 (T-LB)] held the field when the original authority decided the matter. The reviewing authority has brought in the issue of goods that are covered by the registration under Trade and Merchan....
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....ercial acceptance of the product, is the subterfuge that concerned the Hon'ble Supreme Court sufficiently to disapprove of the broad interpretation placed by the Tribunal on the exclusion provision in the exemption notification. The facts in the present dispute do not admit to such a connection between the brand owner and the appellants. There is no allegation of any connection whatsoever. 10. Per contra, the decision of the Hon'ble Supreme Court in re Bhalla Enterprise, rendered a few months after the decision in re Rukmani Pakkwell, has considered the earlier decision as well as the decision of the Tribunal in re Fine Industries and has elaborated on the scope of the exception accorded to brand names thus "3. Paragraph 4 and Explanation IX of Notification have been construed by this Court in Commissioner of Central Excise v. Rukhmani Pakkwell Traders, 2004 (165) E.L.T. 481; as also in Commissioner of Central Excise, Chandigarh v. Mahaan Dairies, 2004 (166) E.L.T. 23. In both these decisions this Court held that Paragraph 4 read with Explanation IX of the notification could not be construed in the manner as contended by the assessees, namely, to make it necessary for the owner ....
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....oved the following passage in the Union of India & Ors v. M/s Wood Papers Ltd. & Ors., 1991 JT (1) 151 at page 155. "When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction....." 5. In this case the exception carved out by Paragraph 4 is not a technicality but pertains to the parameters of the exemption itself." 11. Considered in this perspective, it would appear that the impugned order has denied the benefit of exemption merely because the brands belong to another person. That would constrain the exemption notification and it would be perilous for any small unit to use a brand unless it was registered in their own name. It cannot also be expected to search out and avoid usages of brands that are registered. A small unit that balances on the edge of survival can hardly be expected to find the resources to do so and we would be condemning the small units to stagnate by den....