2009 (2) TMI 4 - SC - Central Excise

Whether the appellants are clearing excisable goods manufactured by them bearing the brand name of another person SSI exemption - It is a clear case where the impugned goods were admittedly affixed with registered logo/trade mark of the other person - CESTAT upheld the demand of duty and penalty imposed on the appellant-company - conclusions of CESTAT are essentially factual and, therefore, there is no scope for interference - appeals are dismissed

Issues Involved:
1. Whether the appellants are clearing excisable goods manufactured by them bearing the brand name of another person.
2. Interpretation and application of the SSI Exemption Notification in relation to the use of brand names or trade names of another person.
3. The relevance and impact of previous judgments on similar issues.

Issue-wise Detailed Analysis:

1. Whether the appellants are clearing excisable goods manufactured by them bearing the brand name of another person:

The primary issue in these appeals is whether the appellants are clearing excisable goods manufactured by them bearing the brand name of another person. The appellants manufacture ice-cream makers and popcorn makers, availing the benefit of the SSI Exemption Notification. They sell their products under their brand name "CREMICA" to various customers, including United Tele Shopping (UTS) and Tele Shopping Network (TSN). The department contends that the goods bear stickers with the words "UTS" and "TSN," which are considered brand names of other persons, thus disqualifying the appellants from the SSI exemption.

The CESTAT concluded that the stickers bearing the words "UTS" and "TSN" indicate a connection in the course of trade with UTS and TSN. Therefore, the goods were considered to bear the brand name of another person, disqualifying the appellants from the SSI exemption. The demand of duty and penalty imposed on the appellant-company was upheld, but the separate penalty imposed on the Director of the company was set aside.

2. Interpretation and application of the SSI Exemption Notification in relation to the use of brand names or trade names of another person:

The SSI Exemption Notification provides that the exemption shall not apply to goods bearing the brand name or trade name of another person. The explanation to the notification defines a brand name as any name, symbol, monogram, label, signature, or invented word or writing used in relation to specified goods to indicate a connection in the course of trade between the specified goods and some person using such name or mark.

The appellants argued that the words "UTS" and "TSN" are not brand names but abbreviations of the marketing companies' names, which do not amount to the use of a brand name. However, the department's stance was that the stickers bearing "UTS" and "TSN" on the goods before clearance from the factory premises indicate a connection in the course of trade with UTS and TSN, thus falling under the definition of a brand name as per the SSI Exemption Notification.

3. The relevance and impact of previous judgments on similar issues:

The judgment references several previous Supreme Court decisions to support its conclusions. In Commissioner of Central Excise, Trichy v. Rukmani Pakk well Traders, it was held that the exemption is lost if the goods bear a brand name or trade name of another person, regardless of whether the goods are the same or different from those for which the brand name is registered. The same principle was reiterated in Commissioner of Central Excise, Chandigarh-I v. Mahaan Dairies, where it was held that the use of a trade name or brand name of another company disqualifies the goods from the benefit of the notification, even if additional words are used.

In Commissioner of Central Excise, Calcutta v. Emkay Investments (P) Ltd., the Court held that the use of a registered logo of another person on the goods disqualifies the manufacturer from the SSI exemption. The judgment emphasized that the exemption notification must be strictly construed, and any use of a brand name or trade name of another person, whether registered or not, disqualifies the goods from the exemption.

The judgment also references the case of Pahwa Chemicals Private Limited v. Commissioner of Central Excise, Delhi, where it was held that the use of another person's name or mark in connection with the goods disqualifies the manufacturer from the exemption, regardless of whether the owner of the trade mark uses it with reference to any particular goods.

Conclusion:

The Supreme Court upheld the CESTAT's decision, concluding that the appellants were not entitled to the benefit of the SSI Exemption Notification as the goods bore the brand names of UTS and TSN, indicating a connection in the course of trade with these entities. The judgment emphasized the strict interpretation of exemption notifications and the relevance of previous judgments in similar cases. The appeals were dismissed, and the demand of duty and penalty on the appellant-company was upheld, while the separate penalty on the Director was set aside.

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