2017 (3) TMI 1737 - AT - Central Excise

SSI Exemption - Department opined that the appellant is selling the brand name of other entity - Held that - Even as per show cause notice, it is a matter of record that the impugned brand name does not belong to any one and no evidence contrary to this has come on record during the course of investigation - It may be mentioned that the Board s Circular No. 52/52/94-CX, dated 1-9-1994 observed in para 4 that if a brand name is not owned by any particular person, the use thereof will not deprive a unit of the benefit of the small scale exemption scheme. This applies not only to locks but to all other goods specified in Notification No. 1/93-C.E. SSI benefit cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Applicability of SSI exemption scheme to the appellant.
- Ownership of the brand name under consideration.
- Interpretation of brand name in relation to SSI exemption.

Analysis:
1. Applicability of SSI exemption scheme to the appellant:
The appellant, a proprietary ship firm, imported products under brand names 'Helsinik Formula' and 'Allure' for repackaging and selling. A search conducted at the appellant's premises led to a show cause notice denying SSI exemption, alleging the appellant was selling another entity's brand name. The Commissioner (Appeals) noted that the brand was not registered to any person/firm during the relevant period, and no evidence suggested otherwise. The Tribunal referenced Circular No. 52/52/94-CX, stating that if a brand name is not owned by any particular person, the SSI exemption can still apply.

2. Ownership of the brand name under consideration:
The Tribunal cited the case of Unjha Ayurvedic Pharmacy v. CCE, emphasizing that the absence of trademark registration or ownership of a brand name allows its use by anyone, not restricting SSI benefits. It differentiated between a product mark and a brand name, clarifying that the latter identifies the product for sale. The Tribunal highlighted that the brand name 'Hathi logo' did not affect the SSI exemption eligibility, as the goods were not sold under that specific logo.

3. Interpretation of brand name in relation to SSI exemption:
Relying on precedents like Laxmi Enterprises v. CCE and CCE v. Gujarat Healthcare, the Tribunal concluded that the impugned order denying SSI exemption was unfounded. By aligning with the principles established in previous cases, the Tribunal set aside the impugned order and allowed the appeals filed by the appellants.

In summary, the judgment addressed the applicability of the SSI exemption scheme to the appellant, clarified the ownership status of the brand name, and interpreted the brand name's significance in relation to SSI benefits. The decision favored the appellants, emphasizing that the absence of brand ownership did not disqualify them from availing the SSI exemption.