2016 (10) TMI 740 - AT - Central Excise

Denial of SSI exemption - N/N. 8/2002-CE dated 01/3/2002 - imposition of penalties - confiscation of goods with an option to pay redemption fine - use of brand name belonging to other person - Held that - we are dealing with the set of companies/firms which are owned or managed or related to a family. The numerous undertaking created, converted or close later, are all having business interconnection in one way or other. Even without going into the legal and statutory implication of formation of these units their day-to-day functioning etc., it can be fairly seen that in such scenario of family connected or managed units the statutory condition for availing exemption under Notification No. 8/2002-CE requires close scrutiny and evidences clearly based on record. Keeping this in view, we find that the lower authorities have perused all the available evidences and arrived at the conclusion. In the absence of strong contrary evidence, we have no reason to interfere with the same. We also note no serious legal infirmity in this findings - appeals rejected - decided against appellant.

Summary

Issues involved:
Denial of small scale industry exemption based on the use of another person's brand name in the final product.

Detailed Analysis:

1. Dispute on Small Scale Industry Exemption:
The appeals revolve around the denial of small scale industry exemption to three manufacturing units for using another person's brand name in their final products. The dispute stemmed from investigations conducted by Central Excise officers, leading to a show cause notice demanding unpaid duty, confiscation of goods, and imposition of penalties. The Original Authority's order, upheld by the Commissioner (Appeals), denied the exemption and imposed penalties, prompting the present appeals.

2. Ownership of Brand Name:
The central issue focused on whether the manufacturing units used the brand name of another person, thereby disqualifying them from the exemption under Notification No. 8/2002-CE. The units argued that they used the brand name on their own account, not of another person. The history of the Plaza brand name was extensively examined, tracing its ownership from Shri Bhimsen Gupta to M/s Plaza Wires & Electricals Pvt. Ltd. The assignment of the brand name to different individuals for various products was scrutinized to determine ownership.

3. Legal Implications and Evidence:
The Original Authority analyzed the legal implications of brand name assignment and the absence of evidence in the trade mark register to support the units' claims. Without concrete evidence of assignment or transmission of the brand name, the lower authorities' findings were deemed valid. The lack of entries in the trade mark register regarding brand name transfer hindered the units' case for exemption.

4. Communication with Trade Mark Authority:
The appellants contended that communication with the Trade Mark Authority did not impact their exemption eligibility. However, the impugned order addressed this aspect, concluding that such communication was not decisive. The case laws cited by the appellants were previously discussed in the order, reinforcing the rejection of their arguments.

5. Family-Managed Business Interconnection:
The judgment highlighted the interconnected nature of the family-owned or managed units involved in the case. Given the business relationships and interconnections among the units, the scrutiny of statutory conditions for exemption under Notification No. 8/2002-CE was emphasized. The lower authorities thoroughly examined the evidence, and in the absence of compelling contrary evidence, the rejection of the appeals was upheld. The familial ties and business interconnections necessitated a meticulous review of the exemption criteria.

In conclusion, the appeals challenging the denial of small scale industry exemption based on the use of another person's brand name were dismissed, emphasizing the importance of concrete evidence, legal implications of brand name ownership, and scrutiny of familial business interconnections in determining exemption eligibility.