2010 (1) TMI 1040 - AT - Central Excise

SSI exemption - use of brand name of others - N/N. 1/93-C.E. - N/N. 8/99-C.E. - Held that - In the absence of any material in that regard and finding of the authority based on analysis of the materials to the effect that the name or mark in question as having acquired the status of being a brand name or trade name within the meaning of the said expression under the said notification question of violation of condition No. 4 cannot arise. Merely because a manufacturer is using a particular logo or name of others same will not be sufficient to arrive at a finding that the same is a brand name or trade name of such other manufacturer. Mere user of the name or logo used by others which has not acquired the status of brand name or trade name within the meaning of the said expression under the said notifications in our considered opinion cannot amount to violation of condition No. 4 of the said notification. Circular issued by the Board bearing No. 52/52/94-CX. dated 1-9-94 clearly indicates that only on acquisition of the goodwill in relation to the particular logo or mark it would acquire the status of being a brand name or trade name within the meaning of said expression used in the said notifications and not otherwise. The authorities below clearly erred in holding that the appellants had violated condition No. 4 of the said notification and on that ground to deny the SSI benefit and to demand the duty. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Violation of condition No. 4 of Notification No. l/93-C.E. and Notification No. 8/99-C.E. regarding the use of brand name or trade name by the appellants.

Detailed Analysis:

Issue 1: Violation of Condition No. 4 of Notifications

Background:
The appellants, engaged in manufacturing machines for wire and cable, were accused of using the brand name or trade name of another unit, M/s. Minimax Engineering Industries, which led to a demand for duty payment along with penalties.

Appellants' Argument:
The appellants contested the allegations, emphasizing the absence of material to establish that the logo used by them was the brand name of M/s. Minimax Engineering Industries. They argued that the relationship between a logo and the product must establish goodwill in the eyes of consumers to be classified as a brand name or trade name.

Department's Argument:
The Department argued that the logo 'Minimax' used by the appellants was associated with M/s. Minimax Engineering Industries even before the formation of the appellants' partnership, indicating a violation of the notification conditions. They cited legal precedents to support their stance.

Legal Provisions:
Condition No. 4 of the notifications prohibits the use of specified goods bearing a brand name or trade name of another person. The definition of 'brand name' or 'trade name' includes any name or mark used to indicate a connection in the course of trade between the specified goods and a person using the name.

Analysis:
The authorities below failed to establish that the logo 'Minimax' had acquired the status of a brand name or trade name of M/s. Minimax Engineering Industries in relation to the machines manufactured by the appellants. The circular issued by the Board clarified that the use of a brand name not owned by a specific person would not affect the small-scale exemption scheme.

Conclusion:
The appellate tribunal ruled in favor of the appellants, setting aside the impugned order and quashing the duty demand based on the lack of evidence to prove a violation of the notification conditions regarding the use of brand names or trade names.

This detailed analysis highlights the core arguments, legal provisions, and reasoning behind the judgment, focusing on the violation of notification conditions related to brand names or trade names in the manufacturing sector.