2011 (1) TMI 502 - AT - Central Excise

Small scale exemption - Held that definition of brand name/trade name appearing in the small scale exemption Notification clearly includes a monogram. Further, the computers manufactured by the respondents and the computers manufactured by their group company M/s. ACCEL Automation Ltd. may bear different names, but both bear a common monogram, which is admittedly used by all the group companies - It has also been observed therein that M/s. ACCEL Automation Ltd. were in existence in the market and were using the monogram in the form of a triangle mark on their computers as a brand name - SSI exemption not available.

Summary

Issues: Small scale exemption eligibility based on the use of a common monogram on computers manufactured by different companies within the same group.

Analysis:
The main issue in this case revolves around the eligibility of the respondents for the small scale exemption based on the use of a common monogram on computers manufactured by both the respondents and their group company. The department argued that the respondents should not be eligible for the exemption as the monogram used is associated with another manufacturer, thus indicating a connection in the course of trade. The lower appellate authority had initially allowed relief to the respondents, relying on a Tribunal decision which was later reversed by the Supreme Court. The respondents contended that they are entitled to the exemption as they produce a different brand of computers compared to their group company, even though they use the same monogram, which they claim is merely a house mark and not a brand name requiring disqualification from the exemption.

Upon considering the submissions from both sides, the Tribunal found that the definition of brand name/trade name in the small scale exemption Notification includes a monogram. Despite the different names on the computers manufactured by the respondents and their group company, both bear a common monogram used by all companies within the group. The Tribunal noted that there is a clear connection between the monogram used and the manufacturers, as the monogram was already established in the market associated with the computers manufactured by the group company. The original authority correctly held that the respondents were not eligible for the exemption as they were using the brand name of another manufacturer. The Tribunal also highlighted that the Supreme Court had reversed the Tribunal's decision relied upon by the lower appellate authority, further supporting the decision to set aside the impugned order and restore the Order-in-Original, ultimately allowing the appeal of the department.

In conclusion, the Tribunal's decision was based on the interpretation of the small scale exemption Notification regarding the use of a common monogram on computers manufactured by different companies within the same group, ultimately leading to the restoration of the Order-in-Original by setting aside the lower appellate authority's decision.