2003 (4) TMI 480 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for SSI Notification benefit based on the use of brand name of another person.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved the issue of whether M/s. Kemfin Chemicals (P) Ltd. was eligible for the benefit of SSI Notification, considering if the goods they manufactured bore the brand name of another person. The Appellant argued that they had been using their own brand name since 1987, displayed on various materials like signboards and letterheads, and that the brand name in question was not registered to another entity. They relied on precedents such as VI John Beauty Tech v. CCE, New Delhi and CCE, Chennai v. Turnbull Control System (I) Ltd. to support their claim that the use of their brand name did not infringe on another's rights. Additionally, they contended that even if the brand name was used, Kemfin Industries could not claim exclusive ownership as the Appellants had been using it for over 15 years with no objection from Kemfin Industries.

On the other hand, the Respondent argued that the Appellants were indeed using the brand name 'Kemfin' belonging to Kemfin Industries, as evidenced by a sale deed and the style of presentation on their products. They cited cases like CCE, Delhi v. Ajay Footwear (I) Ltd. and Chopra Appliances v. CCE, Delhi to show that using a brand name belonging to a different entity could disqualify the Appellants from the SSI exemption. The Respondent highlighted the importance of determining the connection in the course of trade between the goods and the brand owner when assessing the use of a brand name.

After considering both sides' arguments, the Tribunal found that the Appellants' use of the brand name 'Kemfin' indicated a connection with Kemfin Industries, making them ineligible for the SSI exemption. The Tribunal distinguished the present case from precedents like VI John Beauty Tech and Turnbull Control Systems, emphasizing the importance of the manner in which the brand name was used. The Tribunal also rejected the Appellants' claim of ownership based on long use and acquiescence, stating that such determination would fall under the Trade and Merchandise Marks Act. Consequently, the Tribunal held that the Appellants must pay the duty calculated as cum-duty price and imposed a penalty of Rs. 2.5 lakhs for removing excisable goods bearing the brand name without duty payment.

In conclusion, the appeal was disposed of with a decision against the Appellants, emphasizing the significance of the brand name's connection to another entity in determining eligibility for SSI exemption and imposing penalties for duty evasion.