2012 (8) TMI 903 - AT - Central Excise

Penalty u/s 11AC - exemption under Notification No. 9/1998-C.E., dated 2-6-1998 - appellants were clearing the goods with the brand name of others - Held that - As the appellants were clearing the goods under the brand name of M/s. Kothari Industries, therefore, in view of the decision of the Hon ble Supreme Court in the case of CCE v. Rukmani Pakkwell (2004 (2) TMI 69 - SUPREME COURT OF INDIA), the appellants are not entitled for the benefit of SSI Notification. - As the appellant itself claiming the benefit of Notification No. 9/98-C.E. in the declaration filed in the year 2000. We find that the Revenue denied the SSI notification on the ground that the appellants were clearing the goods in the brand name which does not belong to them and registered in the name of M/s. Kothari Industries. The provisions of Notification No. 9/99-C.E. are also the same. - appellants are entitled for cum-duty price. - Decided partly in favour of assessee.

Summary

Issues:
Appeal against demand confirmation, Small scale exemption denial, Brand name usage, Benefit of Notification denial, Cum-duty price entitlement.

Analysis:
The appeal was filed against an order confirming a demand of Rs. 4,83,288/- with interest and penalty under Section 11AC of the Central Excise Act, 1944. The appellants, engaged in manufacturing PVC pipes under Chapter Heading 39, were availing small scale exemption under Notification No. 9/1998-C.E. Revenue officers found the appellants clearing goods under the brand name "Kothari" belonging to another company. A show cause notice was issued, denying exemption due to the use of another brand name. The demand was confirmed, and a penalty imposed, which the Commissioner (Appeals) upheld.

The appellant argued that the demand post-April 1, 1999, after Notification No. 9/98 was rescinded and replaced by 9/99-C.E., is not sustainable. They contended they were using the brand name "Kothari Pipes" and not infringing on the exemption. However, the Revenue contended that the brand name was registered to another entity, citing a Supreme Court decision to support denying the exemption based on brand name usage.

The Tribunal found that the brand name "Kothari" was registered to another entity under the Patents and Trademarks Act, and the appellants were indeed using this brand name for their goods. Relying on the Supreme Court decision, the Tribunal held that even a partial brand name connection can deny SSI notification benefits. The argument that the new Notification No. 9/99-C.E. post-April 1, 1999, should apply was dismissed since the appellants themselves claimed benefit under the old Notification in a later declaration.

Ultimately, the Tribunal found no merit in the appeal, except granting the appellants entitlement to cum-duty price. The appeal was disposed of accordingly.