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2015 (4) TMI 927 - AT - Central ExciseSSI exemption - Use of old shareholder s brand name - penalty under Section 11AC - interest under Section 11AB - Held that - Whole basis of the case that the brand name in question were earlier used by same company under different management and thereafter due to change of management the brand name should have been transferred and in absence of that it cannot be said that brand name belong to the respondent. As far as this basis of demand, we completely disagree with the Revenue that admittedly there is no change in the identity of the company, it is only a change of management. Change of management does not make in change of identity of the company. As regard private limited company it is the company who holds the identity and not share holders, therefore company remained intact irrespective of change of share holders. - In this position if the brand name were owned and used by the same company under the old management there is no need of transfer of brand name from old management to new management because brand name is not owned by the management but it is owned by the company only. - when brand names belong to company how it could be transferred from earlier shareholder to present shareholder. This finding of the Ld. Adjudicating authority is absurd and beyond common sense. In view of our discussion we are of the considered view that the order of the Ld. Commissioner (Appeals) is proper and legal which does not require any interference, therefore the same is upheld - Decided against Revenue.
Issues:
1. Eligibility for SSI exemption under Notification No. 8/99-CE. 2. Ownership of brand names used by the company. 3. Transfer of brand names after a change in management. Analysis: Issue 1: Eligibility for SSI exemption under Notification No. 8/99-CE The case involves the Respondent, engaged in manufacturing Commercial Plywood, availing SSI exemption under Notification No. 8/99-CE. The Revenue contended that the brand names used by the Respondent were not owned by them, leading to a demand for excise duty, penalty, and interest. The Commissioner (Appeals) allowed the Respondent's appeal, stating that the brand names belonged to the company, even after a change in management. The Tribunal upheld this decision, emphasizing that the company's identity remained unchanged despite a change in shareholders, making the Respondent eligible for the exemption. Issue 2: Ownership of brand names used by the company The Revenue argued that the brand names, such as Rajat Ply and Assam Ply, were not owned by the Respondent as they were previously used by another company. However, the Respondent maintained that there was no need to transfer the brand names as the company's identity remained the same. The Commissioner (Appeals) found in favor of the Respondent, stating that the brand names were owned by the company and not by individual shareholders. The Tribunal agreed, highlighting that the burden of proof regarding brand ownership lay with the Revenue, which they failed to establish. Issue 3: Transfer of brand names after a change in management The dispute centered on whether the brand names used by the Respondent required transfer after a change in management. The Revenue argued for transfer based on the previous ownership, while the Respondent asserted that the company's identity, not individual shareholders, determined brand ownership. The Commissioner (Appeals) and the Tribunal supported the Respondent's stance, emphasizing that the brand names remained with the company, unaffected by changes in shareholders. The Tribunal dismissed the Revenue's appeal, affirming the Commissioner's decision and highlighting the lack of evidence supporting the need for brand name transfer post-management change. In conclusion, the judgment clarifies the importance of company identity in determining brand ownership, especially in cases of management changes. The Tribunal's decision upholds the Commissioner's ruling, emphasizing that the brand names used by the Respondent rightfully belonged to the company, warranting eligibility for the SSI exemption under Notification No. 8/99-CE.
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