2016 (2) TMI 150 - AT - Central Excise

Denial of SSI exemption - demanding duty and imposing penalty - APSL was clearing the goods bearing brand name Newman belonging to other person viz. Newman Valve Industries NVI who has applied for registration of the brand name Newman - Held that - On examining the documents we do not find any substance in the contention put forward by Revenue. As already stated, these documents show that NVPL had applied for registration of trademark. So the brand name Newman does not belongs NVI. NVPL being a company incorporated, and having separate legal identity it cannot be said that merely because Shri Ashwini Sharma has signed the letter or application for registration the brand name Newman would belong to NVI. The appellants have put forward a consistent case from the very beginning denying the fact that brand name Newman belongs to NVI. Further the documents substantiate this contention. In such circumstances, the impugned order passed denying the SSI exemption and demanding duty and imposing penalty is not legal and proper. The same is liable to be set aside. - Decided in favour of assessee

Summary

Issues: Allegation of misuse of brand name 'Newman' for duty evasion under SSI exemption.

Analysis:
1. Factual Background: M/s Apex Systems (P) Ltd. (APSL) engaged in valve manufacturing without Central Excise registration due to small scale industrial exemption. Allegation: APSL cleared goods with 'Newman' brand, allegedly belonging to Newman Valve Industries (NVI), misusing SSI exemption.

2. Appellant's Defense: APSL denied using 'Newman' brand, asserting they used 'Apex' or no brand. NVI denied 'Newman' ownership, citing NVPL's brand name application in 2003. APSL argued 'Newman' did not belong to NVI.

3. Revenue's Argument: Revenue claimed APSL used 'Newman' brand, supported by Ashwini Sharma's statement and trademark application by NVI through Mahtta Trademark Co. APSL's goods with 'Newman' seized at their premises.

4. Court's Evaluation: Court analyzed APSL's defense, NVPL's brand name application, and documents supporting APSL's claim that 'Newman' did not belong to NVI. Court found no evidence to establish 'Newman' ownership by NVI. APSL's consistent denial and supporting documents led to setting aside the duty demand and penalties imposed.

5. Judgment: The Tribunal set aside the impugned order, allowing the appeals, as the evidence did not prove APSL's misuse of 'Newman' brand. The decision was pronounced on 27.11.2015, in favor of the appellants.