2009 (4) TMI 744 - AT - Central Excise

SSI Exemption - Brand name - Featherlite - Use of brand name of another - Notification/No. 8/2003 -

Summary

Issues Involved:
1. Eligibility for Small Scale Industry (SSI) exemption under Notification No. 8/2003.
2. Use of brand name "Featherlite" and its impact on SSI exemption eligibility.
3. Demand for duty, interest, and penalty under various sections of the Central Excise Act, 1944.

Issue-wise Detailed Analysis:

1. Eligibility for SSI Exemption under Notification No. 8/2003:
The core issue revolves around whether the assessee, engaged in manufacturing and clearance of furniture, is eligible for SSI exemption under Notification No. 8/2003. The Revenue contends that the assessee used the brand name "Featherlite," which belongs to another entity, thus disqualifying them from the exemption. The Tribunal, however, found that the brand name "Featherlite" is associated with the assessee's registered company name "Featherlite Seating System (Pvt.) Ltd." and not with any other entity. The Tribunal cited precedents where companies using their registered names on products were entitled to SSI exemptions, affirming that the exemption is applicable when the brand name is not of another person.

2. Use of Brand Name "Featherlite" and Its Impact on SSI Exemption Eligibility:
The Department's investigation revealed that certain products bore the brand name "Featherlite," allegedly owned by M/s. Featherlite Corporation. The Tribunal examined whether the markings "F" and "Featherlite" on the products indicated a brand name connection with another entity. It concluded that the markings did not establish such a connection, as the brand name "Featherlite" was part of the assessee's company name. The Tribunal emphasized that for SSI exemption denial, it must be proven that the brand name/logo of another entity is affixed on the goods, which was not the case here.

3. Demand for Duty, Interest, and Penalty:
The show cause notice demanded duty of Rs. 77,50,000/- for contravention of various Central Excise Rules, along with interest and penalties. The Adjudicating Authority dropped the major part of the demand, finding no evidence that the brand name "Featherlite" belonged to another entity. The Tribunal upheld this decision, noting that the Revenue failed to provide sufficient proof that the brand name "Featherlite" was not the assessee's. The Tribunal also referred to several case laws, including A.J. Bantex (P) Ltd. and Vetcare Organics P. Ltd., which supported the assessee's position that using their registered company name did not disqualify them from SSI exemption.

Conclusion:
The Tribunal concluded that the assessee was eligible for SSI exemption under Notification No. 8/2003, as the brand name "Featherlite" was part of their registered company name and not of another entity. The appeal filed by the Revenue was rejected, and the impugned order was upheld as correct and legal.