2014 (12) TMI 865 - HC - Central Excise

Denial of benefit of the Notification No.175/1986 CE, dated 1.3.1986 - Goods cleared in brand name of other companies - Imposition of penalty - Held that - The plea of the appellant does not merit consideration for the simple reason that the original order is composed of three components. The first two components are in relation to the use of the brand names PAL and SUZUKI , against which an appeal was filed by the appellant and that challenge was dismissed by the Tribunal confirming the finding of the Collector of Central Excise. With regard to the third component, namely, goods cleared with the brand name containing the word COX at the top and the word MARUTI at the bottom, the Revenue has chosen to file an appeal against that portion of the order of the Collector of Central Excise whereby benefit of exemption under Notification No.175/86, dated 1.3.1986 was given to the appellant and that appeal of the Revenue was allowed and the Tribunal held that the appellant herein is ineligible for the benefit of exemption under Notification No.175/86, dated 1.3.1986. Symbol/brand name, extracted above, shows that the word MARUTI has been used along with the word COX . From a reading of the above explanation, what is required to be established is that by usage of such symbol/brand name, there should be a connection with the brand name of some other person. In the case on hand, the usage of the symbol/brand name of MARUTI is apparent. Mere absence of the letters MARUTI in Devanagari, as used by M/s.Maruti Udyog Ltd., does not make the case of the appellant any better as the explanation provides for such interpretation in respect of use of name or mark such as symbol, monogram, labels, etc., which show indication in respect of the specified goods, which we find is apparent in the case on hand. Therefore, the Tribunal was justified in upholding the department s contention that the benefit of notification will not be available in respect of hub caps and show caps bearing the symbol/brand name MARUTI . - Decided against assessee.

Summary

Issues:
1. Interpretation of benefit under Notification No.175/1986 CE
2. Entertaining and passing orders on Order-in-Original No.72/1994
3. Determination of manufacturing and clearing branded goods

Analysis:

Issue 1: Interpretation of benefit under Notification No.175/1986 CE
The appellant, a manufacturer availing exemption under Notification No.175/86 as a small scale industry, faced allegations of wrongfully availing the benefit due to brand names of ineligible companies found on cleared goods. The Adjudicating Authority compared brand names on goods to those of other companies and denied exemption for some items. The Tribunal upheld this denial based on the connection between the appellant's brand names and those of other companies, emphasizing the significance of the brand name in trade. The Tribunal's decision was based on Explanation VIII of the Notification, which defines brand name/trade name and requires a connection between goods and a person using the name or mark, regardless of registration status. The Tribunal found the appellant's use of the brand name MARUTI indicated a connection with Maruti Udyog Ltd., justifying the denial of exemption.

Issue 2: Entertaining and passing orders on Order-in-Original No.72/1994
The Tribunal faced criticism for entertaining and deciding on Order-in-Original No.72/1994, despite the confirmation of findings by the first respondent. The Tribunal's decision was challenged by the appellant, arguing against a second adjudication due to the original order's components being upheld previously. However, the Tribunal justified its intervention based on the distinct issues related to different brand names and the Revenue's appeal against the exemption granted to the appellant under Notification No.175/86. The Tribunal's decision to disallow the benefit of exemption for the appellant under the Notification was upheld, emphasizing the need for a clear connection between the brand name used and another entity in trade.

Issue 3: Determination of manufacturing and clearing branded goods
The case revolved around the appellant's manufacturing and clearance of goods with brand names linked to other companies. The Adjudicating Authority compared brand names on goods to those of ineligible companies, leading to the denial of exemption for certain items. The Tribunal upheld this denial, emphasizing the importance of establishing a connection between the brand name used and another entity in trade. The Tribunal's decision was based on the interpretation of Explanation VIII of Notification No.175/86, which defines brand name/trade name and requires a clear indication of a connection between specified goods and the person using the name or mark. The Tribunal's decision to deny the benefit of exemption under the Notification for the appellant was upheld, highlighting the necessity for a trade-related connection in determining eligibility for exemption.

In conclusion, the Tribunal's decision to deny the benefit of exemption under Notification No.175/86 for the appellant's goods bearing brand names connected to other companies was upheld, emphasizing the importance of establishing a trade-related connection through brand names in determining eligibility for exemption.