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2016 (3) TMI 1047 - AT - Central ExciseBenefit of SSI Notification No.8/2003 - whether assessee have used the brand name of other person and whether the demand is hit by limitation and, consequently, penalty is imposable or not? - Held that - Concept of similar etc. cannot be used to interpret the meaning of the word occurring in the notification by taking recourse to modes other than plain language. We find that para-4 of the notification stipulates that notification shall not apply to the goods bearing a brand name or trade name of another person. In the present case, appellants have not used the brand name of Elac of another person but cleared under their own brand name Elac Excel . Further, it is pertinent to state that as already dealt the issue in the preceding paragraphs, the Appellant s name of the company itself is M/s.Elac Marketing Pvt.Ltd. The company name itself has the word Elac which is part of the company s name and the appellants cleared the goods indicating their company name Elac followed with Excel . Therefore, it cannot be construed that they have affixed brand name of other person. The brand name of Elac Excel used by the appellant on Automatic Storage Water Heaters is not a brand name / trade name of any other person and not hit by para (4) of SSI Notification and they are eligible for the SSI exemption limit of ₹ 1.5 crores under the said notification.
Issues Involved:
1. Denial of SSI exemption benefit. 2. Use of brand name of another person. 3. Limitation period for issuing the SCN. 4. Imposition of penalty on the appellant and its director. Detailed Analysis: 1. Denial of SSI Exemption Benefit: The appellant, M/s. Elac Marketing Pvt. Ltd., was denied the SSI exemption benefit under Notification No. 8/2003 by the Commissioner of Central Excise. The core issue was whether the brand names "Elac Excel," "Elacvarmxpress," "Elac Excel Fiesta," and "ElacVarm Slim" used by the appellant were similar or akin to the registered brand name "Elac" of another company, M/s. K.N. Industries. The Commissioner concluded that the use of these brand names disqualified the appellant from the SSI exemption, leading to a demand for Excise Duty amounting to Rs. 83,42,016/- along with interest and equivalent penalty under Section 11AC of the Central Excise Act. The appellant argued that "Elac Excel" was distinct from "Elac" and that they had applied for trademark registration for "Elac Excel" on 16.8.2012 and 21.8.2012. 2. Use of Brand Name of Another Person: The appellant contended that the brand name "Elac Excel" was different from "Elac," which was a registered trademark of M/s. K.N. Industries. They argued that the products were distinct, with the appellant manufacturing water heaters with ABS plastic bodies and K.N. Industries using metal bodies. The Tribunal observed that the appellant's brand name "Elac Excel" was not the same as "Elac" and relied on the Madras High Court's judgment in UOI Vs Pillaiyar Soda Factory, which distinguished between "similar" and "same" brand names. The Tribunal concluded that the appellant had not used the brand name of another person and was eligible for the SSI exemption. 3. Limitation Period for Issuing the SCN: The appellant argued that the SCN was time-barred, as it was issued on 11.7.2013, while the investigation began on 17.4.2012. The Tribunal agreed, noting that the department was aware of the facts from the investigation date, making the SCN issued later beyond the permissible period. The Tribunal did not delve deeply into the limitation issue, as the demand was set aside on merits. 4. Imposition of Penalty on the Appellant and Its Director: The Commissioner had imposed a penalty of Rs. 10 lakhs under Rule 26 of the Central Excise Rules 2002 on Shri K.S. Ganesh, Director of the appellant-company. The Tribunal, however, set aside the penalty on both the appellant and its director, as the demand itself was found to be unsustainable on merits. Conclusion: The Tribunal held that the appellant had rightly availed the SSI exemption benefit under Notification No. 8/2003, as the brand name "Elac Excel" was not the same as "Elac" of M/s. K.N. Industries. Consequently, the demand for Excise Duty and the penalties imposed were set aside. The appeals were allowed in favor of the appellant.
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