2005 (4) TMI 654 - AT - Central Excise

Issues Involved:
1. Eligibility for SSI exemption under Notification No. 1/93-C.E. as amended by Notification No. 59/94-C.E.
2. Ownership and use of brand names/trade marks.
3. Applicability of para 4 of Notification No. 1/93-C.E. to the respondents' goods.
4. Validity and implications of the Civil Court's decree.
5. Interpretation and application of the High Court's judgments.

Issue-wise Detailed Analysis:

1. Eligibility for SSI Exemption under Notification No. 1/93-C.E. as Amended by Notification No. 59/94-C.E.:
The lower appellate authorities had allowed the benefit of SSI exemption under Notification No. 1/93-C.E. for clearances of aerated waters and other non-alcoholic drinks by the respondents after 1-4-1994. The Revenue challenged this, arguing that the clearances were made under brand names belonging to another person, Shri K.P.R. Sakthivel, which attracted the bar in para 4 of the Notification as amended by Notification No. 59/94-C.E.

2. Ownership and Use of Brand Names/Trade Marks:
The business history revealed that the brand names "KALI," "KALI MARK," "BOVONTO," "TRIO," "SOLO," "KALI COLA," "FRUTANG," and "CAPTAIN" were initially registered in the name of Shri K.P.R. Sakthivel. The respondents were permitted to use these brand names within their respective territories as per a DEED OF MUTUAL AGREEMENT dated 12-3-1993. However, the agreement did not confer ownership of the brand names on the respondents but merely permitted their use.

3. Applicability of Para 4 of Notification No. 1/93-C.E. to the Respondents' Goods:
The amendment to Notification No. 1/93-C.E. by Notification No. 59/94-C.E. introduced para 4, which stated that the exemption would not apply to goods bearing a brand name or trade name of another person. The respondents' goods were cleared under brand names registered in the name of Shri K.P.R. Sakthivel, thus falling under the exception in para 4. The Tribunal held that the respondents could not claim the benefit of the SSI exemption as the brand names belonged to another person.

4. Validity and Implications of the Civil Court's Decree:
The Civil Court's decree, obtained by Shri K.P.R. Dhanushkodi, declared his exclusive right to use the brand names within his territory and restrained others from interfering. However, this decree did not confer ownership of the brand names on him or other respondents. The Tribunal noted that the decree only allowed the use of brand names within specific territories and did not affect the applicability of para 4 of the Notification.

5. Interpretation and Application of the High Court's Judgments:
The High Court's Single Bench judgment, which denied the benefit of the exemption to the respondents, was set aside by the Division Bench for remand to the adjudicating authorities. However, the substantive findings that the brand names belonged to Shri K.P.R. Sakthivel and that the respondents were merely permitted to use them were not interfered with. The Tribunal noted that the Division Bench's remand did not affect the applicability of para 4 of the Notification.

Conclusion:
The Tribunal concluded that the respondents were not eligible for the benefit of the SSI exemption under Notification No. 1/93-C.E. (as amended) for any period from 1-4-94 in respect of goods cleared under brand names belonging to Shri K.P.R. Sakthivel. The impugned orders were set aside, and the appeals were allowed.

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