2016 (1) TMI 432 - AT - Central Excise

Denial of SSI exemption under Notification No. 8/2003-CE dated 01.03.2003 - Use of other s band name - interest under Section 11 A (1) and 11 AB of the CEA, 1944 and imposed penalty under Rule 25 of CER, 02 - Held that - Since the Apex Court has settled the issue of using the brand name and trade name in the appellant s own case, by respectfully following the Apex Court s decision 2015 (6) TMI 226 - SUPREME COURT , we hold that the appellants are using their own brand name and are eligible for SSI exemption under Notification No. 8/03-CE dated 01.03.2003. Hence, penalties involved in all the appeals are not sustainable. Accordingly, all the impugned orders are set aside - Decided in favour of assessee.

Summary

Issues Involved:
1. Denial of SSI exemption under Notification No. 8/2003-CE.
2. Liability to pay central excise duty with interest.
3. Imposition of penalty under Rule 25 of CER, 2002.
4. Ownership and usage of the brand name "Kali Mark" and other associated trademarks.

Detailed Analysis:

1. Denial of SSI Exemption under Notification No. 8/2003-CE:
The appellants, manufacturers of aerated water and soft drinks under the brand name "Kali Mark," claimed SSI exemption under Notification No. 8/2003-CE dated 01.03.2003. The adjudicating authority denied this exemption, asserting that the brand names "Kali Mark," "Bovonto," and "Frutang" belonged to other persons. The Tribunal noted that the Hon'ble Supreme Court had previously addressed this issue in the appellants' favor, recognizing that the appellants were the owners of the brand names and thus eligible for SSI exemption.

2. Liability to Pay Central Excise Duty with Interest:
The adjudicating authority held that the appellants were liable to pay central excise duty with interest under Section 11A(1) and 11AB of the Central Excise Act, 1944. This decision was based on the premise that the appellants used brand names belonging to other entities. However, the Supreme Court's decision clarified that the appellants were the rightful owners of the brand names, thereby nullifying the duty liability.

3. Imposition of Penalty under Rule 25 of CER, 2002:
Penalties were imposed under Rule 25 of the Central Excise Rules, 2002, on the grounds of using brand names of other persons. Following the Supreme Court's ruling, which established the appellants' ownership of the brand names, the Tribunal found that the penalties were not sustainable. Consequently, all penalties were set aside.

4. Ownership and Usage of the Brand Name "Kali Mark" and Other Associated Trademarks:
The Tribunal extensively reviewed the ownership and usage of the brand names. The appellants argued that their business, originally a family enterprise under HUF identity, was partitioned in 1977, leading to individual units operating independently but using the same brand names. The Supreme Court's decision confirmed that the trade name "Kalimark Aerated Water Works" and associated trademarks were vested in the appellants and their descendants, as per a mutual agreement dated 12.03.1993. This agreement allowed the appellants to use the brand names without paying royalties, thus affirming their ownership.

The Tribunal, respecting the Supreme Court's decision, concluded that the appellants were using their own brand names and were therefore eligible for SSI exemption under Notification No. 8/2003-CE. The Tribunal set aside all impugned orders and allowed the appeals with consequential relief.

Conclusion:
The Tribunal, adhering to the Supreme Court's judgment, held that the appellants were the rightful owners of the brand names and thus entitled to SSI exemption. The liabilities for duty and penalties were annulled, and all appeals were allowed with consequential relief.