2015 (2) TMI 876 - AT - Central Excise

SSI exemption under Notification No.8/2003 dt. 1.3.2003 - brand name AKAS is owned by M/s. Akas Medical Equipment, Trichy, an another entity - Held that - Brand name AKAS is owned by M/s. Medical Apparatus and Instruments who is also engaged in the business. Prima facie, we find that applicant used the brand name of another firm. On perusal of Certificate of Registration of Trade Mark, it is clear that brand name was issued to M/s. Medical Apparatus and Instruments which is owned by Shri V. Arjun Sooraj and Shri K. Vijayarangan, trading as Akas Medical Equipment. On a query from the Bench, the learned advocate submits that Shri Arjun Sooraj is the common partner of the applicant firm and other firm. In view of that prima facie we are not impressed with this submission of the learned advocate. In the case law relied upon in the case of Anil Pumps (P) Ltd. (2004 (12) TMI 134 - CESTAT, NEW DELHI), the brand name was owned by Anil who is the director of the appellant-company. Hence the said case law would not be applicable to the facts of the instant case. In view of that, applicant failed to make out a prima facie case for waiver of predeposit of the entire amount of duty along with interest and penalty. However, considering the submissions made by the applicant, we direct the applicant to predeposit further amount of ₹ 2,00,000 within 8 weeks. Upon deposit of the said amount, predeposit of balance amount of duty along with interest and penalty would be waived and recovery thereof stayed till disposal of the appeal. - Partial stay granted.

Summary

Issues:
1. Denial of SSI exemption due to brand name ownership.
2. Dismissal of appeal for non-compliance with stay order.
3. Prima facie ownership of brand name "AKAS" by another entity.
4. Eligibility to use the brand name based on partnership.
5. Applicability of precedent in brand name ownership cases.
6. Requirement for further predeposit and waiver conditions.

Analysis:
1. The case involved a partnership firm manufacturing sight testing instruments under the brand name "AKAS" and trading medical equipment. The firm was denied SSI exemption as the brand name was claimed to be owned by another entity, resulting in a demand of duty, interest, and penalty. An appeal was filed, but dismissal occurred due to non-compliance with a stay order requiring a predeposit.

2. The firm argued that a partner was also associated with the entity owning the brand name, justifying their use of "AKAS." They referenced a Tribunal decision in a similar case to support their claim. However, upon examination, it was revealed that the brand name was indeed owned by a different entity, leading to doubts about the firm's claim.

3. The Tribunal noted that the brand name "AKAS" belonged to a separate entity, as evidenced by the Certificate of Registration of Trade Mark. The common partnership between the firm and the entity owning the brand name did not suffice to establish the right to use the brand name. A precedent cited by the firm was deemed inapplicable due to differences in brand ownership.

4. While the firm failed to establish a strong case for waiving the predeposit, the Tribunal considered their submissions and directed a further predeposit of a specified amount within a timeframe. Upon compliance, the remaining predeposit amount would be waived, and recovery stayed pending appeal disposal.

In conclusion, the judgment addressed the issues of brand name ownership, partnership implications, and predeposit requirements, ultimately ruling in favor of the need for further predeposit based on the lack of a strong prima facie case for exemption.