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2011 (1) TMI 782 - HC - Central ExciseSSI Exemption - Brand name - The respondent No. 1 M/s. Minimax Industries is a partnership firm of which respondent No. 2 is one of the partners - partnership firm and MEI are being run by the family members - Two brothers are partners in the said partnership firm while the MEI is the sole proprietorship concern of third brother. Both of them have been using the mark Minimax for the last number of years though the use by MEI may be prior in point of time. However even that is the history. Initially all the three brothers were doing the business together however later on these two brothers of partnership firm started separate business in the same line using same name i.e. Minimax . In these circumstances it cannot be said that the partnership firm started using the name Minimax which belonged to MEI - Admittedly MEI has not got the brand name/logo Minimax registered either under the Registration Act or under the Trade Mark Act or any other Act - It is not a case of the department that the said MEI has allowed the partnership firm to use the said name. The Tribunal has also arrived at a finding of fact that Minimax has not acquired any such reputation that it can be associated with MEI - Therefore nothing could be brought on record by the Department to demonstrate or prove that Minimax has acquired any brand name or trade name as defined in Explanation IX of the Notification No. 1/93-C.E - Decided in favor of assessee.
Issues Involved:
1. Whether the respondent partnership firm violated condition No. 4 of Notification No. 1/93-C.E. and Notification No. 8/99-C.E. by using the brand name "Minimax" which allegedly belonged to another entity. 2. Whether the partnership firm was entitled to the Small Scale Industry (SSI) exemption under the Excise Act. Detailed Analysis: Issue 1: Violation of Condition No. 4 of Notification No. 1/93-C.E. and Notification No. 8/99-C.E. The central issue was whether the partnership firm, M/s. Minimax Industries, violated condition No. 4 of the relevant notifications by using the brand name "Minimax," which allegedly belonged to M/s. Minimax Engineering Industries (MEI). Condition No. 4 stipulates that the exemption would not apply to goods bearing the brand name or trade name of another person. Findings and Arguments: - The Central Excise Officers found that the partnership firm was using the brand name "Minimax" on their products. - The partnership firm argued that both entities, MEI and the partnership firm, were using the trade name "Minimax" in their own respective rights. - The partnership firm claimed that the name "Minimax" did not indicate any connection between the goods manufactured by them and MEI, as the full name and address of the manufacturer were prominently displayed. - The adjudicating authority found that the brand name "Minimax" belonged to MEI, which had been using it since 1980, thereby violating condition No. 4 of the notification. Issue 2: Entitlement to Small Scale Industry (SSI) Exemption The partnership firm contested the denial of SSI exemption, arguing that the name "Minimax" did not qualify as a brand name or trade name under the definitions provided in the notifications. Findings and Arguments: - The CESTAT allowed the appeal of the partnership firm, stating that mere use of a name or logo used by others, which had not acquired the status of a "brand name" or "trade name," would not amount to a violation of condition No. 4. - The Tribunal emphasized that for a name or mark to qualify as a "brand name" or "trade name," it must establish a connection between the goods and the person using the name or mark. - The Tribunal referenced several Supreme Court judgments, including Tarai Food Ltd. v. CCE and CCE v. Grasim Industries Ltd., which clarified that a brand name must indicate a connection between the product and the manufacturer. Supreme Court Judgments Referenced: - Tarai Food Ltd. v. CCE: The term "brand name" connotes a mark, symbol, design, or name unique to a particular manufacturer, establishing a connection between the product and the manufacturer. - CCE v. Grasim Industries Ltd.: The term "brand name or trade name" is qualified by the words "that is to say," indicating that even an ordinary name or mark used in relation to a product for indicating a connection with another person suffices. - CCE v. Bhalla Enterprises: The assessee would be debarred only if it uses a brand name with the intention of indicating a connection with another person's goods. Conclusion: - The Tribunal found that the partnership firm and MEI were family-run businesses, both using the name "Minimax" for several years. The use by MEI might have been prior, but the partnership firm did not use the name "Minimax" belonging exclusively to MEI. - The Tribunal concluded that "Minimax" did not acquire a reputation that could be associated solely with MEI. - The Department failed to prove that "Minimax" had acquired the status of a brand name or trade name as defined in the notifications. Judgment: The High Court dismissed the appeal, agreeing with the Tribunal's application of the principles and finding no substantial question of law. The partnership firm was entitled to the SSI exemption as the name "Minimax" did not qualify as a brand name or trade name under the relevant notifications.
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