2011 (6) TMI 649 - AT - Central Excise

SSI exemption - Notification No. 8/1998-C.E. - user of brand name of other persons Held that - the department is justified in contending that the respondents were not entitled to avail the benefit of the said notification. - The finding of the Commissioner (Appeals) that use of logo of marketing firm does not amount to use of brand name of another person is directly in contravention of the provisions of law under the said notification - decided against the assessee. Period of limitation - held that - The relevant facts being suppressed that the department was entitled to invoke extended period of limitation, the notice issued of 20th June, 2003 did not relate to the period more than five years. Being so, there is no substance in the point sought to be raised relating to bar of limitation. Cum duty price - held that - on this issue matter remanded back.

Summary

Issues:
1. Entitlement to SSI exemption benefit based on the use of brand names of other persons.
2. Interpretation of the law regarding the use of brand names under SSI exemption notifications.
3. Justification for setting aside the Adjudicating Authority's order by the Commissioner (Appeals).
4. Application of the extended period of limitation in the case.
5. Consideration of cum-duty price in the demand calculation.
6. Existence of cross-objection filing by the respondents.

Analysis:
1. The case involved the entitlement of SSI exemption benefit to a pharmaceutical company manufacturing medicines classified under a specific sub-heading. The company had been using brand logos of other entities while availing the exemption. The inspection revealed this practice, leading to a show cause notice for denial of the exemption, duty imposition, and penalties.

2. The Adjudicating Authority confirmed the demand, citing the use of other brand names, following Supreme Court precedents. However, the Commissioner (Appeals) disagreed, stating that the use of marketing firms' logos did not constitute using another person's brand name under the SSI exemption notifications.

3. The appellant argued that the Commissioner (Appeals) erred in setting aside the Adjudicating Authority's order, citing established legal principles and a Bombay High Court judgment. The respondents contended that the use of brand names was not for trade purposes and challenged the invocation of the extended limitation period.

4. The law on brand name usage was clarified, emphasizing that even using additional words with another company's brand name would disqualify from SSI exemption. The Bombay High Court's decision further supported this interpretation, leading to the rejection of the Commissioner (Appeals) findings.

5. Regarding the limitation period, it was deemed justified due to the suppression of relevant facts by the respondents. The absence of declarations or documents supporting the exemption led to the invocation of the extended limitation period, as revealed during the raid.

6. While the issue of cum-duty price was raised by the respondents, it was not addressed due to the main ground for setting aside the Adjudicating Authority's order. The matter was remanded for proper consideration, despite the absence of filed cross-objections.

7. The decision concluded that there was no interference warranted in rejecting the SSI exemption benefit, confirming the duty demand, interest, and penalties. However, the remand for the cum-duty price issue was approved, with a clear directive for the Commissioner (Appeals) to focus solely on that aspect during the reevaluation process.