2008 (5) TMI 549 - AT - Central Excise

Summary

Issues:
1. Denial of SSI exemption due to alleged use of another person's brand name.
2. Interpretation of relevant Supreme Court judgments regarding SSI benefit eligibility.

Analysis:
1. The case involved three small scale industries facing duty confirmation for allegedly affixing the brand name "Kumar" belonging to another entity on their products. The appellants denied the allegation, explaining that they sent raw materials to a job-worker for conversion into castings, which were then used as component parts in their final product. The job-worker engraved "Kumar" on the castings for identification purposes, not for direct sale. The Commissioner relied on a Supreme Court ruling to deny SSI exemption, but the appellants argued for eligibility based on other Supreme Court judgments supporting SSI units. The Tribunal noted that the final product, power-driven pumps, did not bear any brand name, distinguishing the case from the precedent cited by the Commissioner. Consequently, the Tribunal granted a waiver of pre-deposit and allowed a stay on recovery pending appeal disposal.

2. The learned SDR contended that the appellants had indeed used another person's brand name, thus disqualifying them from the SSI exemption. However, the Tribunal's analysis focused on the specific circumstances of the case, where the brand name was used by the job-worker for identification purposes and not by the appellants for direct marketing. By differentiating the facts from the precedent cited by the Commissioner, the Tribunal found merit in the appellants' argument for SSI exemption. The Tribunal's decision to grant a stay on recovery until the appeal's resolution indicates a favorable interpretation of the appellants' eligibility for the SSI benefit, based on the distinct nature of their manufacturing process and the absence of the contested brand name on the final product.