2009 (8) TMI 924 - AT - Central Excise

Valuation - includibility - amortized cost of dies and moulds used in the manufacture of castings - SSI exemption - use of brand name of others

Summary

Issues involved:
1. Demand of duty on account of amortized cost of dies and moulds used in the manufacture of castings.
2. Demand of duty on the use of the brand name "Anil" belonging to another party.

Analysis:

1. The first issue pertains to the demand of duty on the amortized cost of dies and moulds used in the manufacture of castings. The appellant does not contest the demand and agrees that such cost is required to be added in the assessable value of the castings, as held by the Larger Bench in the case of M/s. Sterlite Industries. Therefore, the demand of duty of Rs. 64,025/- along with a penalty of Rs. 10,000/- is confirmed in this regard.

2. The second issue revolves around the demand of duty on the use of the brand name "Anil," which was claimed to belong to the appellant's family and used with permission from another party. The Commissioner (Appeals) rejected the claim citing that Central Excise law does not permit mutual bestowing of the right to use a brand name. However, the Tribunal finds that as per the Memorandum of Understanding between family members, the brand name "Anil" did not belong to any single person but was to be used by all three parties. The Tribunal refers to legal precedents to support the position that if a brand name belongs to the assessee even if others are entitled to use it, the benefit of exemption cannot be denied. The Tribunal also cites a case where a trade mark of a dissolved partnership firm could belong to all partners post-dissolution without attracting certain provisions. Consequently, the confirmation of duty of Rs. 9,827/- and the penalty of Rs. 2500/- imposed on this count are deemed unjustified. The appeal is partly allowed and partly rejected in this aspect.

In conclusion, the appellate tribunal ruled in favor of the appellant regarding the demand of duty and penalty related to the use of the brand name "Anil," based on the interpretation of the ownership rights and entitlements as per the Memorandum of Understanding and legal precedents cited.