2005 (5) TMI 526 - AT - Central Excise

Summary

Issues:
Availability of notification no. 175/86-C.E. to the appellant based on brand name ownership.

Analysis:
The dispute in this appeal revolves around the availability of notification no. 175/86-C.E. to the appellant, which was denied due to the use of the brand name of M/s. American Refrigeration Co. Ltd. The duty amount of Rs. 1,89,803/- was confirmed against the appellant based on this denial.

The appellant argued that they were using the brand name 'A/W' of M/s. ARCO WHITNEY for hydraulic equipments, which they acquired through a purchase deed dated 28-3-94. The purchase included all assets, goodwill, right to use the trademark, technical drawings, designs, patents, and licenses. They contended that post the purchase, the trademark rightfully belonged to them and was correctly utilized.

The authorities below cited a clause from the deed stating that the vendors could not use the trademark within 250 miles from the purchaser's place of business for 5 years post-sale. However, upon scrutiny of the purchase deed, it was evident that the unit 'ARCO WHITNEY' was sold along with all assets, including trademarks and designs. The appellant, having acquired the going concern M/s. ARCO WHITNEY, had the legitimate right to use the brand name and was not infringing on someone else's trademark.

Referring to a Supreme Court case, it was established that the benefit of small scale notification cannot be denied when a trademark is assigned to another person. The use of the same brand name for different classes of goods owned by different entities is permissible in law. In this case, the brand name 'ARCO WHITNEY' was rightfully used by the appellant post the purchase, as evidenced by clauses in the agreement granting permission to use the brand name and conduct business under the same name. The appellant acquired all assets of the running unit, including the trademark, dispelling any notion that it still belonged to the seller. Consequently, the appellant was entitled to the benefit of the small scale exemption notification, leading to the setting aside of the impugned order and granting relief to the appellant.