2007 (1) TMI 22 - AT - Central Excise

SSI Exemption Alleged that appellant had made wrong declaration and deliberately didn t disclose the brandname of their product with intent to avail the benefit of SSI Exemption After considering the fact authority allowed the appeal and impugned order is set aside

Summary

Issues:
Challenge to central excise duty recovery, penalty imposition, and interest payment based on ownership of brand name for small scale exemption.

Analysis:
1. The appellant contested the Commissioner's order for central excise duty recovery, penalty imposition, and interest payment amounting to Rs.39,15,000/-, stating that the Tribunal's decision in a related appeal was accepted and not challenged before the Supreme Court.

2. Initially, the Tribunal upheld the Commissioner's order denying small scale unit exemption to the appellant and confirming the duty demand, penalty, and interest. This decision was made before a remand by the Supreme Court.

3. The Supreme Court remanded the matter based on an alternative plea regarding the appellant's trademark registration, emphasizing that if the trademark was relevant, the question of limitation would be academic.

4. The dispute arose from a show cause notice issued against the appellant and a sole proprietary concern for mis-declaring brand ownership to claim small scale exemption. The Commissioner held that the brand name belonged to the sole concern until a transfer to the appellant, leading to denial of exemption and allegations of duty evasion.

5. The appellant contended ownership of the brand name "REIZ" for electronic transformers.

6. The Commissioner's findings on brand ownership and denial of exemption were challenged by the appellant, citing registration of the trademark "REIZ" in their name and compliance with declaration requirements.

7. The appellant argued that the registration of the trademark "REIZ" covered the entire show cause notice period, emphasizing the absence of suppression regarding brand ownership.

8. The department supported the Commissioner's findings, highlighting that manufacturing goods under another's brand name would disqualify the appellant from the exemption.

9. The Tribunal considered the subsequent trademark registration in the appellant's name, effective from 1-6-1995, and its relation to the show cause notice period, concluding that the appellant was entitled to the exemption.

10. The Tribunal justified the appellant's entitlement to the exemption based on trademark registration and concurrent use provisions, emphasizing the registration's validity and exclusive rights conferred.

11. Precedents were cited to support the Tribunal's decision regarding trademark registration and entitlement to the exemption, emphasizing the importance of registration date and concurrent use provisions.

12. The Tribunal affirmed the appellant's right to the exemption under Notification No. 1/93 due to trademark registration and usage, rendering the question of limitation academic.

13. Consequently, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant.