TaxTMI 
TaxTMI 
2026 (1) TMI 1510
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....Zonal Unit (hereinafter referred to as DGCEI) at the factory premises of the Appellant and at the office premises of M/s. Ozonic Health Care and M/s. Sri Aksaya Agencies in Madurai. The officers of DGCEI found that the Appellant had cleared pharmaceutical products to various customers on payment of duty and had cleared medicines to M/s. Sri Aksaya Agencies and M/s. Ozonic Health Care without payment of duty. It was also found that the packages of the goods cleared without payment of duty, the Appellant had used certain brand names like "OZOFER", "OZONIC" which were belonging to "Ozonic Health Care". 3. Upon completion of investigation, the Show Cause Notice No. 10/2015 dated 30.03.2015 was issued to the Appellant by the Additional Director, DRI, Chennai Zonal Unit with the proposals to (i) deny the SSI exemption claimed by them on the products such as Ovit Plus Tab, Cedo tab, Cim Tab, Acemo Tab, Monzo Plus Tab, Chynor Lite Tab etc manufactured and cleared under Chapter 3004 of Central Excise Tariff to parties such as M/s Ozonic Health Care, M/s Sri Aksaya Agencies etc. as the Appellant is not the owner of the above Branded medicines; (ii) demand of Central Exci....
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....e a connection, in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person. They argued that as the definition of Brand Name under both the above notifications is the same and also as both the notifications were issued for providing SSI exemption under Central Excise Law, the following clarifications issued by the Ministry of Finance (Department of Revenue) vide Circulars No. 52/52/94-CX dated 01.09.1994 and 71/71/94-CX dated 27.10.1994 on the interpretation of what constitutes "usage of Brand Name of another person" and consequential eligibility to SSI exemption under Notification No. 1/1993-CE are also applicable to interpretation of similar aspect under Notification No. 8/2003 - Central Excise. "Circular No. 52/52/94-CX dated 01.09.1994 4. ....it is clear that if a brand name is not owned by any particular person, the use thereof will not deprive a unit of the benefit of the small scale exemption scheme. This applies not only to locks but to all other goods specified in Notification No. 1/93-C.E." "Circular No. 71/71/94-CX dated 27.10.1994 5. As explained ....
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....annot be denied. It is seen that in that case the other person had filed an application for registration of brand name and the Tribunal observed that mere filing of such a application does not make him the owner of the brand name. In the present case, there is virtually no evidence on record to show that the brand name belonged to the other company. To the same effect was another decision of the Tribunal in the case of M/s. A.J. Bantex (P) Ltd. v. CCE, Bangalore [2008 (229) E.L.T. 582 (Tri.-Bang.) = 2008 (87) RLT 135 (CESTAT-Bang.)], it was held that "A.J. Bantex" being appellants own name, they have a right to use it and as the Revenue has not produced any evidence that brand name belongs to another person, benefit of notification cannot be denied to the assessee. It was also held that burden of proof that the brand name used by the assessee belongs to another person is on the Revenue." The Ld. Advocates contended that the existence of a Brand Name owned by / belonging to another person has not been established by the investigation and therefore, seen in the light of above clarifications issued vide Circulars No. 52/52/94-CX dated 01.09.1994 and 71/71/94-CX dated 27.10.1994 and....
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....uch brands, the Revenue's allegation that the brand name is owned by such persons is wrong and therefore, as the Revenue totally failed to establish such nexus between the brand names said to be used by the appellant and the alleged owners of such brands as held in CCE Hyderabad-IV vs Stangen Immuno Diagnostics [2015 (318) ELT 585 (SC)], SSI exemption benefit cannot be denied to the Appellant. 7.4 They argued that assuming that the brand used by the Appellant belonged to M/s Ozonic Health Care whose proprietor Shri Somasundaram is also the MD of the Appellant Company, the use of certain brand names (which were predominantly marketed by Shri Somasundaram through his proprietory concern M/s Ozonic Health Care) in the products of the Appellant company is not an infringement of SSI condition, as Shri Somasundaram has every right to use his knowledge, property etc. for use by the Appellant company. The Learned Advocates placed reliance on the cases of Famcom Rubber Products (I) Pvt Ltd Vs CCE DelhiIII [2016 (343) ELT 689 (Tri.-Del.)] and Elex Knitting Machinery Co Vs CCE Chandigarh-I [2003 (159) ELT 499 (Tri.-Del.)] to submit that since the so called brands were owned by proprietors ....
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....ocation of the unit though the officers of DGCEI, Central Zonal Unit visited the manufacturing premises and instead, put the responsibility on the Appellant to prove through documents that the unit was located in rural area. It was further submitted that since the Appellant are affected by the absence of proper investigation, they are producing the certificate issued by the Tahsildar having jurisdiction over the Chikkarayapuram village where the manufacturing unit of the Appellant was located. 7.7 The Ld. Advocates averred that the entire issue is interpretational as to the eligibility to exemption under notification No. 8/2003 - Central Excise dated 01.03.2003 and therefore, there is no intention/suppression and penalty under Section 11AC of Central Excise Act, 1944 is not imposable as there is no mens rea. In this regard, they placed reliance on the judgment of the Hon'ble Supreme Court of India in Commissioner of C.Ex., Chandigarh Vs Pepsi Foods Ltd [2010 (260) E.L.T. 481 (S.C.)] where it was held as under: "20. It is well settled that when the statutes create an offence and an ingredient of the offence is a deliberate attempt to evade duty either by fraud or misrepr....
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....ared which did not bear the Brand Names of Ozonic Health Care and Sri Aksaya Agencies and such value works out to Rs. 23.54 Lakhs and Rs. 43.33 Lakhs for years 2013-14 & 2014- respectively and duty on the same which works out to Rs. 1,45,493/- and Rs. 2,67,782/- should be deducted from the demand as the department has taken the stand that duty is payable on goods cleared under the brand name owned by Ozonic Health Care and Sri Aksaya Agencies. 8. The Ld. Authorized Representative Ms. G. Krupa, for the Department reiterated and supported the findings of LAA and submitted that in the proceedings before original adjudicating authority and lower appellate authority, the Appellant failed to produce any valid certificate as mentioned in the judgment passed by the CESTAT, Chennai in the case of CCE Vs. Triogene Labs Pvt Ltd., and thereby the Appellant failed to prove to the lower authorities that their manufacturing unit is located in rural area. She submitted further that the Appellant has cleared goods under the brand name owned by Ozonic Health Care and Sri Aksaya Agencies and intentionally evaded payment of Central Excise duty on the same. 9. Heard both sides and perused the app....
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....on whether the document submitted by the Appellant before the LAA is sufficient if the same is found to be genuine but also fails to specify the documents that are needed to establish that the manufacturing unit of Appellant is located in rural area. The Appellant has now submitted copy of the certificate issued by jurisdictional Tahsildar vide RC No. 5106 dated 20.11.2018. In the final order No. 1137/2011 dated 12.10.2011 in case of CCE Vs Triogene Labs Pvt Ltd. reported in 2012-TIOL-246CESTAT-MAD which was relied by the LAA, it is held as under: - "We find that the lower appellate authority has relied upon (a) Tamil Nadu Govt. website classifying Okkium Thoraipakkam to be a rural village falling under St. Thomas Mount Block in Kancheepuram District (b) Certificate issued by Director of Industries & Commerce and (c) certificate issued by the Ministry of Rural Development to hold that Thoraipakkam village is in a rural area and, therefore, the SSI benefit is admissible even though goods manufactured by the assessees were cleared under some other persons brand name. The assessees have now produced certificate dt. 19.9.2011 from the jurisd....
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.... "6. Apart from this, even otherwise legally it cannot be concluded that the appellants were using the brand name of another person. The brand name "ELEX", according to the Department belonged to M/s. Elex Engineering Works. But Shri Pritam Singh who is the proprietor of the appellant's firm, is one of the partners in that firm. Being co-owner of the brand name in the above said firm, he could not be said to had used the brand name of another person, in the manufacture and clearance of the goods in his individual capacity. He cannot be legally said to be running another firm of M/s. Elex Knitting Machinery, as single person cannot constitute any firm under the law. Therefore, being already co-owner of the brand name, he was competent to use the same." 6. Ld. Authorized Representative for the Revenue submitted that in that case, the appellants were a partnership firm. In our considered view, in the present case, one of the Directors is the proprietor of other unit and therefore, the case of M/s. Elex Knitting Machinery Co. (supra) would squarely apply in the present case. 7. In view of the above discussion, following the decision of the Tribunal in the case of M/....
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....to the benefit of the exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name." ii. CCE Hyderabad-IV vs Stangen Immuno Diagnostics [2015 (318) ELT 585 (SC)] "15. We would also like to reproduce the following observation from Commissioner of Central Excise, Chandigarh-II v. Bhalla Enterprises, (2005) 8 SCC 308 = 2004 (173) E.L.T. 225 (S.C.) :- "The apprehension of the assessees that they may be denied the exemption merely because some other traders even in a remote area of the country had used the trade mark earlier is unfounded. The notification clearly indicates that the assessee will be debarred only if it is uses on the goods in respect of which exemption is sought, the same/similar brand name with the intention of indicating a connection with the assessees goods and such other person or uses the name in such a manner that it would indicate such connection. Therefore, if the assessee is able to satisfy the assessing authorities that there was no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connecti....