2015 (1) TMI 1319 - AT - Central Excise

SSI exemption - use of brand name of others - Held that - the appellants used the brand name FAMCOM which is owned by other unit M/s. Farm Manufacturing Co. Delhi a proprietorship firm. One of the Directors of the appellant company is the proprietor of the said unit. It is also contended by the appellant that after clubbing the value of the clearances of both the units are within the prescribed limit of exemption during the relevant period - exemption allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of SSI exemption notification due to the use of a brand name.
2. Appeal against the denial of benefit and imposition of duty, interest, and penalty.
3. Interpretation of ownership and brand name usage in relation to exemption eligibility.

Analysis:
1. The judgment deals with the denial of the Small Scale Industries (SSI) exemption notification to the appellant due to the use of the brand name "FAMCOM" belonging to another unit, M/s. Farm Manufacturing Co. Delhi. The Adjudicating Authority confirmed the demand of duty, interest, and penalty, which was upheld by the Commissioner (Appeals).

2. The appellant contended that one of the Directors is the Proprietor of the said unit and argued that the goods were semi-finished and not marketable. Reference was made to previous legal decisions to support the claim. On the other hand, the Authorised Representative for the Revenue reiterated the findings of the Commissioner (Appeals) stating that the appellant used the brand name of another company, making them ineligible for the SSI exemption.

3. The Tribunal analyzed the ownership structure and brand name usage, citing a previous case involving M/s. Elex Knitting Machinery Co. where the Tribunal held that being a co-owner of the brand name does not constitute the use of another person's brand name. The Tribunal found that one of the Directors being the proprietor of the other unit allowed for the application of the same principle. Therefore, the appeals were allowed based on the precedent set by the M/s. Elex Knitting Machinery Co. case, which was upheld by the Hon'ble Punjab & Haryana High Court.

This judgment clarifies the legal interpretation of brand name usage in relation to exemption eligibility and provides guidance on ownership structures concerning brand names in cases of exemption notifications.