2007 (8) TMI 287 - AT - Central Excise

Revenue denied SSI exemptions to appellant on ground of use of brand name of others appellant manufacture texturised yarn on job-work for Kiran group of Units and many others - revenue recovered slips marked Kiran dyed yarn from appellant s premises appellant has no dyeing plant in premises slips were sent by Kiran group to make the identification of their goods easy principal manufacturer dyes the yarn itself exemption under Not. no. 1/93 not deniable

Summary

Issues: Alleged misuse of brand name leading to denial of small scale exemption under Notification No. 1/93.

Analysis:
1. Misuse of Brand Name Allegation: The case revolved around the appellant's activity of pasting slips bearing the brand name "Kiran dyed yarn" on cartons, which led to allegations of using another person's brand name, potentially disqualifying them from the small scale exemption. The lower authorities upheld this allegation, resulting in the impugned order.

2. Appellant's Defense: The appellant contended that they were solely manufacturing "textured yarn" and not "textured dyed yarn," emphasizing that they were not using the brand name of the principal manufacturer. They highlighted the absence of slips pasted on cartons during the officers' visit and argued that the slips were provided by the principal manufacturers for identification purposes only.

3. Absence of Dyeing Machinery: Notably, there was no evidence on record to contradict the appellant's claim that they lacked machinery for dyeing yarn. The slips bearing the brand name "Kiran" were intended for identification by the principal manufacturers, ensuring the segregation of different yarn batches.

4. Legal Precedent and Tribunal's Decision: The Tribunal referred to the case of M/s. S.A. Industries, establishing that the use of a brand name on covers does not equate to using it on goods. In this context, the pasting of slips on old cartons for identification purposes did not constitute the misuse of another person's brand name, thereby entitling the appellant to the benefits under Notification No. 1/93.

5. Decision and Relief: Ultimately, the Tribunal set aside the impugned order, allowing the appeals and granting consequential relief to the appellant. The judgment, pronounced on 8-8-2007, emphasized that the mere act of affixing slips for identification on cartons did not amount to the unauthorized use of a brand name, thereby upholding the appellant's eligibility for the small scale exemption under the said notification.