2008 (9) TMI 231 - AT - Central Excise

SCN proposing to deny the benefit of SSI Exemption under Notifications No. 175/86 and No. 1/93 as the appellants were using the brand name of foreign concern technical know-how and information received on payment of consideration - appellants denied having used the trade name or brand name or logo of the foreign German company - mere use of term BKW which is the name of the German company will not by itself disentitle from the benefit of the Notification held that once there is a assignment of trade mark/name on payment of valuable consideration, then there is no violation of SSI Notification exemption not deniable

Summary

Issues:
1. Denial of SSI Exemption benefit due to the use of a foreign brand name.
2. Rejection of appellant's pleas by Order-in-Original and Commissioner (A).
3. Lack of findings on the question of limitation by both authorities.
4. Interpretation of the Technical Collaboration Agreement and consideration paid for the use of the brand name "BKW."
5. Comparison of legal precedents supporting and denying the benefit of SSI Notification based on the use of foreign brand names.

Analysis:
1. The appeal stemmed from the denial of the SSI Exemption benefit under Notifications No. 175/86 and No. 1/93 due to the alleged use of a foreign brand name by the appellants. The Technical Collaboration Agreement with a German company allowed the appellants to use the name "BKW" after approval. The department alleged that the use of "BKW" constituted the use of a foreign brand name, leading to demands and penalties.

2. The pleas of the appellants were rejected by both the Order-in-Original and the Commissioner (A). The authorities emphasized that the goods were affixed with the brand name "BKW," disqualifying the appellants from the SSI Notification benefit. However, no findings were provided on the question of limitation, prompting a remand for further consideration.

3. The lack of findings on the limitation issue was noted by the Tribunal, which had kept the issue open for determination in a de novo proceeding. The failure to address this crucial aspect raised concerns about the thoroughness of the previous decisions.

4. Upon careful consideration of the submissions and the terms of the agreement, the Tribunal found that the appellants had paid valuable consideration for the exclusive use of the brand name "BKW." Legal precedents, including the Supreme Court's ruling in CCE, Goa v. Primella Sanitary Products, supported the appellants' entitlement to the SSI benefit despite the use of a foreign brand name.

5. The legal arguments presented by both sides referenced various judgments to support their positions. While the Revenue relied on cases where the use of another person's name disqualified the SSI benefit, the appellants cited cases where the assignment of a brand name on payment of consideration upheld the benefit. The Tribunal ultimately sided with the appellants, emphasizing the importance of valuable consideration for the use of the foreign brand name "BKW."

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellants based on the consideration paid for the use of the brand name and the legal precedents supporting their entitlement to the SSI Notification benefit.