2011 (4) TMI 431 - AT - Central Excise

SSI Exemption - Notification 8/2003 dated 1.3.2003 - transfer of brand from one person to another - whether the assignment made according to the MOU between the two parties amounts to transfer of the brand name from Sri Ram Kishan to the appellant or not - Held that - in the case of the appellant, the MOU is valid for five years and after five years both the parties are at liberty to change which means ownership remains with Sri Ram Kishan and after five years reverts to him if MOU is not renewed - But prima facie temporary assignment as in this case is not covered by the decision of Supreme Court cited by the appellant - appellant to deposit the amount within six months and report compliance to Commissioner(A)

Summary

Issues:
1. Interpretation of brand name ownership in relation to exemption Notification.
2. Consideration of MOU in determining brand name ownership.
3. Requirement of deposit for appeal consideration.
4. Prima facie case for full waiver of deposit.
5. Temporary vs. permanent assignment of brand name.

Analysis:
The case involved the appellant, engaged in manufacturing goods and enjoying exemption under Notification 8/2003. An offense case was registered due to the brand name VIPANCHI being allegedly owned by another party, resulting in a demand for duty, interest, and penalties. The appellant sought early hearing of a stay application due to departmental pressure for payment. The consultant argued that an MOU assigned the brand name to the appellant, which was not considered by the adjudicating authority. The Commissioner (Appeals) required a full duty deposit for appeal consideration, leading to rejection for non-compliance.

The consultant cited legal precedents where brand name assignment entitled the assignee to exemption benefits. However, the Departmental Representative (DR) contended that the brand name ownership remained with the original party. The Tribunal deliberated on whether the MOU's assignment constituted a transfer of ownership, noting the temporary nature of the agreement. The Tribunal found previous Supreme Court decisions inconclusive as they focused on brand name usage rather than assignment. It was determined that the appellant needed to make a prima facie case for a full waiver of deposit, considering the temporary nature of the assignment.

Given the legal complexities and financial constraints of the appellant, the Tribunal directed a deposit of Rs.15.5 lakhs within six months for further appeal consideration by the Commissioner (Appeals). The decision highlighted the distinction between temporary and permanent brand name assignments and emphasized the need for compliance with the deposit requirement. The early hearing application, stay application, and appeal were disposed of accordingly, pending the deposit and subsequent review by the Commissioner (Appeals).