2015 (11) TMI 1240 - AT - Central Excise

Denial of SSI Exemption - whether or not the main appellant manufactured and cleared cables using another person s brand name - Held that - Even if it is conceded that such manufacture on the brand name of Deelux Premium is due to an error in the supply of print block, the appellant cannot escape the consequences of such error resulting in duty liability. Other than this, there is no direct or corroborative evidence to establish that the appellant manufactured and cleared cables with brand name of Deelux Premium during the whole of period of demand. On the contrary there are evidence, both documentary and through statement, that the appellant did manufacture cables with their brand name DEELUX during the impugned period. - we are unable to subscribe to the view that all the cables manufactured by the appellant during the impugned period are with brand name of another person, in the absence of any documentary/corroborative evidence to that effect. We find the confirmation of demand substantially relying on the statements of various people which were retracted later cannot be sustained, as the basic requirement of establishing the veracity of these statements by cross-examination has not been done. Brand name of DEELUX has been in the use of the appellant for many years before coming into existence of Deelux Cable & Wire Pvt. Ltd. having different brand name Deefux Premium. In fact both the brand names were sought to be registered on the same day. However, the brand name DEELUX is yet to be registered. Though the word DEELUX is an invented word, the brand name of M/s Deelux Cable & Wire Pvt. Ltd. is known as Deelux Premium. It is relevant to note that the name of both the units have this invented word and as such it cannot be said that the usage of word Deelux is a part representative of Deelux Premium and as such it established a link to that brand. - reasoning given by the Original Authority on this account is not justified. - Order is not sustainable - Decided partly in favour of assessee.

Summary

Issues:
- Whether the main appellant manufactured and cleared cables using another person's brand name?
- Whether the brand name 'Deelux' used by the main appellant is deceptively similar to 'Deelux Premium' belonging to another company, justifying denial of small scale exemption?

Analysis:

Issue 1: Manufacturing and Clearing Cables with Another Person's Brand Name
The case involved appeals by M/s Deelux Cable Industries against an order demanding excise duty for allegedly using the brand name 'Deelux Premium' belonging to another unit. The Commissioner confirmed the duty demand and imposed penalties based on statements without allowing cross-examination. The appellant argued that the demand was based on presumptions and selective reliance on statements. They contended that they had been using the brand name 'Deelux' since 1980, before 'Deelux Premium' existed. The appellant explained the presence of 'Deelux Premium' cables in their premises as an error in the supply of print block. The Tribunal found insufficient evidence to support the claim that all production was under 'Deelux Premium' brand, especially since the appellant had a history of using 'Deelux' brand. The order was set aside except for duty related to seized 'Deelux Premium' cables.

Issue 2: Deceptively Similar Brand Names and Small Scale Exemption
The Revenue alleged that the brand name 'Deelux' was deceptively similar to 'Deelux Premium,' justifying denial of small scale exemption. The Original Authority considered the family connection between the appellant and the company owning 'Deelux Premium' as a basis for denying the exemption. However, the Tribunal found that 'Deelux' had been in use by the appellant before 'Deelux Premium' existed, and both names were sought to be registered on the same day. The Tribunal concluded that the usage of 'Deelux' did not establish a link to 'Deelux Premium' and that the denial of exemption based on this ground was unjustified. The order was set aside except for the duty related to seized 'Deelux Premium' cables.

In conclusion, the Tribunal partly allowed the appeals, setting aside the original order except for the duty related to seized cables bearing the 'Deelux Premium' brand. The Tribunal found that the appellant did not manufacture all cables under the 'Deelux Premium' brand and that the usage of 'Deelux' did not justify denial of small scale exemption. The decision was pronounced on 29.10.2015.