2016 (8) TMI 782 - AT - Central Excise

SSI Notification No. 9/99-CE - entitlement for benefit - use of brand name of foreign manufacturer - Held that - as it is seen that, the benefit of small scale exemption notification stands extended to an assessee, where he was using the brand name of foreign manufacturer, which was assigned to the Indian manufacturer under an agreement. Inasmuch as the issue is decided by the Supreme Court in the case of Commissioner of Central Excise , Bangalore Vs. Otto Bilz (India) Pvt. Ltd. 2015 (10) TMI 2149 - SUPREME COURT , no merits found in the present appeal of the Revenue. - Decided against the Revenue

Summary

Issues:
1. Interpretation of small scale exemption notification for goods manufactured under a foreign brand name assigned to an Indian manufacturer.

Analysis:
The case involved a dispute regarding the eligibility of the respondent, engaged in manufacturing first-aid bandages under the brand name "SANI PLAST," for the benefit of a small scale exemption notification. The Revenue contended that since the brand name belonged to a foreign manufacturer and was assigned to the Indian respondent, they were not entitled to the exemption. The Original Adjudicating Authority upheld the demand raised by the Revenue, but the Commissioner (Appeals) ruled in favor of the respondent, leading to the Revenue's appeal.

Upon hearing both parties, the Tribunal noted that the issue revolved around the assignment of a foreign brand name to the Indian manufacturer. The Tribunal referred to a similar case before the Supreme Court, emphasizing the importance of the assignment agreement in determining the ownership of the brand name. In the Supreme Court case, it was established that when a foreign company assigns its trademark to an Indian entity, the Indian entity can be considered the rightful user of the brand name, not "another person."

The Tribunal found that the respondent in the present case had the exclusive right to use the brand name "SANI PLAST" in India under an agreement with the foreign brand owner. Therefore, the Tribunal concluded that the respondent was entitled to the small scale exemption notification as they were using the brand name in their own right, not as another person. Consequently, the Tribunal rejected the Revenue's appeal, affirming the respondent's eligibility for the exemption.

In summary, the judgment clarified that an Indian manufacturer can avail of the small scale exemption notification even when using a foreign brand name if there is a valid assignment agreement in place. The ownership and exclusive right to use the brand name by the Indian manufacturer play a crucial role in determining eligibility for such exemptions, as established in relevant legal precedents.