2017 (10) TMI 1433 - AT - Central Excise

SSI Exemption - use of brand name of others - it was alleged that the appellant on the seat cover was using the brand name of Hind Ware which was owned by M/s. Hindustan Sanitary Ware Industries - Held that - The appellant was doing a job work/manufacturing exclusively for M/s. Hindustan Sanitary Ware Industries. No such item was sold in the market or third party. The final packing was also done at the factory premises as per the instruction of M/s. Hindustan Sanitary Ware Industries - When it is so, the brand name was not used by the appellant for its own benefit but it was a part of job work/ business by putting the label of the brand name and hand over after packing to the M/s. Hindustan Sanitary Ware Industries. There is no justification to sustain the impugned order and the same is hereby set aside - appeal allowed decided in favor of appellant.

Summary

Issues:
1. Denial of SSI exemption for using another brand name.
2. Appellant's exclusive manufacturing for another company.
3. Justification of impugned order based on Supreme Court ruling.
4. Applicability of law based on the period in dispute.

Analysis:
1. The case involved appeals against Order-in-Appeal Nos. 38-39/2014, dated 7-4-2014, concerning the period from 9-2-1997 to January 2002. The appellant was engaged in manufacturing products subject to the Central Excise Tariff Act, 1985, including Plastic Flushing Cisterns, European Water Closet Seat-covers, Bathtubs, and Bathroom mirror Cabinets.

2. A search revealed that the appellant used the brand name "Hind Ware" owned by another company, leading to the denial of SSI exemption, excise duty demand, and penalty imposition. The appellant contended that the seat covers were exclusively supplied to the other company, with final packing materials provided by them, and labeling done under their supervision. The appellant argued that the brand name usage was part of job work exclusively for the other company.

3. The Revenue justified the impugned order citing a Supreme Court ruling where SSI exemption was denied for using another brand name. However, it was acknowledged that the period in dispute predated the mentioned judgment, requiring consideration of the law applicable at that time.

4. After considering the submissions, the Tribunal found that the appellant was engaged in job work/manufacturing exclusively for the other company, with no sales to third parties. The Tribunal concluded that the brand name usage was not for the appellant's benefit but part of the job work/business, leading to the setting aside of the impugned order and allowing both appeals.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, the legal precedents referenced, and the Tribunal's reasoning leading to the final decision to set aside the impugned order and allow the appeals.