2005 (6) TMI 456 - AT - Central Excise

Summary

Issues:
Denial of SSI exemption under Notification No. 8/2000 and 8/2001 based on the use of the brand name 'Hot Breads' belonging to another entity, M/s. Oriental Cuisines (P) Ltd.

Analysis:
The appellants argued that they used the brand name 'Hot Breads' in accordance with an Agreement dated 26-7-1999, emphasizing that M/s. Oriental Cuisines (P) Ltd. did not produce all types of Cakes and Pastries, and therefore, the use of 'Hot Breads' on such items by the appellants should not disqualify them from the SSI exemption. They contended that as bread is exempt from Excise duty and 'Hot Breads' was not used by M/s. Oriental Cuisines (P) Ltd. for Cakes and Pastries, the denial of the exemption was unjustified. The Tribunal noted that the appellants used the brand name 'Hot Breads' on a different product than that of M/s. Oriental Cuisines (P) Ltd., and thus, did not infringe on another entity's brand name for the same item. Citing various judgments and Board Circulars, the Tribunal supported the appellants' position, emphasizing that the Commissioner's new grounds for denial were not raised in the Show Cause Notice, rendering the denial unsustainable.

The Tribunal considered the appellants' argument that their use of 'Hot Breads' on Cakes and Pastries was independent of the Agreement with M/s. Oriental Cuisines (P) Ltd., and therefore, permissible. After careful examination, the Tribunal agreed with the appellants, concluding that they were entitled to use the brand name 'Hot Breads' on different products they manufactured, which were distinct from those produced by M/s. Oriental Cuisines (P) Ltd. The Tribunal found merit in the appellants' position, supported by legal precedents and Circulars, and overturned the Commissioner's decision to deny the exemption.

The Commissioner introduced a new ground alleging that the appellants used a foreign brand associated with a foreign company, which was not raised in the Show Cause Notice. The Tribunal deemed this new ground as invalid, echoing the appellants' argument that the denial based on this ground was unfounded. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellants and allowing the appeal. The Tribunal emphasized that the Commissioner's introduction of new grounds not mentioned in the Show Cause Notice was impermissible, leading to the reversal of the decision to deny the SSI exemption to the appellants.