2008 (9) TMI 232 - AT - Central Excise

Benefit of SSI exemption under Notification 1/93 brand/trade name of another person - as the goods bore the brand name Cyclone and Uniflow owned by M/s. RMEL & M/s. REUL respectively along with the trifid logo which logo has not been found or established to belong to or to be owned by M/s. Remi Udyog as alleged by the Revenue no director of REMI Udyog cross-examined moreover, said logo appears to a common design/symbol which can be used by any manufacturer - finding of the Commissioner that M/s. RMEL & M/s. REUL are eligible to benefit of Notifications, is sustainable

Summary

Issues Involved:
1. Eligibility for SSI exemption under Notifications 1/93, 7/97, 16/97, and 8/98.
2. Use of the trifid logo and whether it constitutes a brand name or trade name of another person.
3. Recovery of differential duty and imposition of penalties.

Issue-wise Detailed Analysis:

1. Eligibility for SSI Exemption:
The case revolves around whether M/s. RMEL and M/s. REUL were correctly availing the SSI exemption under various notifications. The SSI exemption is not applicable if the goods are affixed with a brand name or trade name of another person. The Commissioner found that the trifid logo did not belong to another person, which allowed M/s. RMEL and M/s. REUL to avail the SSI exemption. The Tribunal upheld this finding, noting that the trifid logo was not an exclusive trademark owned by M/s. Remi Udyog, and thus, the companies were eligible for the exemptions.

2. Use of Trifid Logo:
The central issue was whether the trifid logo used by M/s. RMEL and M/s. REUL on their products constituted a brand name or trade name of another person, specifically M/s. Remi Udyog. The Tribunal noted that there was no evidence to support the claim that the trifid logo was owned by M/s. Remi Udyog. Statements from various directors and managers indicated that the trifid logo was used by multiple companies within the Remi Group and was not exclusively owned by any single entity. The Tribunal referenced the CBEC Circular No. 52/52/94, which clarified that a brand name or trade name must indicate a connection in the course of trade between the goods and the person using the name or mark. Since no such connection was established, the trifid logo did not disqualify the companies from the SSI exemption.

3. Recovery of Differential Duty and Penalties:
The show cause notice issued to M/s. RMEL and M/s. REUL proposed the recovery of differential duty and imposition of penalties based on the alleged misuse of the SSI exemption. The Commissioner dropped the proceedings, finding that the trifid logo did not belong to another person. The Tribunal upheld this decision, rejecting the appeals by the Revenue. The Tribunal relied on the Supreme Court's judgment in Nirlex Spares Pvt. Ltd. v. CCE, which held that the use of a design not owned by another person does not disqualify a manufacturer from SSI exemption. The Tribunal concluded that the duty demand and penalties were not sustainable.

Conclusion:
The Tribunal upheld the Commissioner's decision that M/s. RMEL and M/s. REUL were eligible for the SSI exemption as the trifid logo was not an exclusive trademark of M/s. Remi Udyog. Consequently, the duty demands and penalties proposed by the Revenue were rejected. The judgment was pronounced in court on 25-9-2008.