2012 (12) TMI 768 - AT - Central Excise

SSI Notification No.8/2003-CE denial as use of others Brand Name/Trade Name Penalty - Held that - As per the provisions of SSE Notification No.8/2003-CE & as decided in CCE, TRICHY Versus GRASIM INDUSTRIES LTD. 2005 (4) TMI 64 - SUPREME COURT OF INDIA if the goods are manufactured with the brand name which resembles to the brand name registered with the other person, the manufacturer is not entitled for the benefit of the Small Scale Exemption Notification Admittedly, the brand name PYRO ELECTRIC is registered with M/s. Pyro Electric Instruments Goa Pvt. Ltd. and the applicants are manufacturing goods with the brand name by adding the word INSTRUMENTS the manufacturer assessee is not entitled for the benefit of Notification - the applicants failed to make out a case for total waiver of duty, thus directed to deposit Rs.25,00,000/- within a period of eight weeks & report Compliance.

Summary

Issues:
- Waiver of pre-deposit of duty, interest, and penalties under Small Scale Exemption Notification
- Prior use of brand name and entitlement to exemption
- Financial hardship and undue hardship considerations

Analysis:
The applicants filed for waiver of pre-deposit of duty, interest, and penalties totaling Rs.51,35,195, which were demanded due to clearing goods under the brand name PYRO ELECTRIC INSTRUMENTS belonging to another company and wrongly availing the Small Scale Exemption Notification. The applicants claimed they had been manufacturing goods under the brand name since October 1991, before the brand name was registered by the other company in August 2009. They argued that their prior use entitled them to use the brand name and benefit from the exemption. Additionally, they contended that they were supplying goods to original equipment manufacturers, making them eligible for the exemption.

The Revenue, however, argued that since the brand name was registered with another company, the applicants were not entitled to the exemption. They cited Supreme Court decisions to support their position, emphasizing that manufacturing goods under a brand name belonging to another entity disqualifies the manufacturer from the Small Scale Exemption Notification. The Revenue also highlighted that the General Manager of both the Goa and Mumbai units was the same, indicating awareness of the brand name ownership.

The Tribunal analyzed the Small Scale Exemption Notification and relevant case law, noting that manufacturing goods under a brand name similar to a registered brand name disqualifies a manufacturer from the exemption. Considering the financial hardship claimed by the applicants, the Tribunal directed them to deposit Rs.25,00,000 within eight weeks, waiving the pre-deposit of the remaining amount of duty, interest, and penalties. The recovery of the waived amount was stayed during the pendency of the appeals, with a compliance deadline set for 8.11.2012.