2017 (2) TMI 481 - AT - Central Excise

SSI exemption - N/N. 8/2003-CE dated 1/3/2003 - use of brand name of other person - The claim of the appellant right from beginning is that the goods manufactured and sold by them do not bear the brand name of Sunflex , it is only mentioned on the invoice, whereas the same was not affixed on the product. Held that - Reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II Versus M/s AUSTRALIAN FOODS INDIA LTD. 2013 (1) TMI 330 - SUPREME COURT , where it was held that even if brand is not affixed on the product but the product is sold by using the identity of brand, then also SSI exemption is not available - In the present case as per the customer s acceptance agreement mention of brand on invoice clearly establishes that the goods with the identity of sunflex brand were being sold. The invoice itself is an evidence that sunflex branded goods were being manufactured and sold by the appellants. It is not only the invoice which bear the description of sunflex brand goods but also the customers in their statements accepted that they were purchasing sunflex range of products that again shows that the customers were buying the products i.e. sunflex brand venetion blinds, vertical blinds, roller blinds. The appellant is not entitled for the SSI exemption - Decided against the assessee.

Summary

Issues:
- Whether the appellant was entitled to SSI exemption under Notification No.8/2003-CE dated 1/3/2003 for manufacturing venetion blinds, vertical blinds, and roller blinds.
- Whether the goods manufactured by the appellant bore the brand name "Sunflex" belonging to another person, thereby disqualifying them from the exemption.

Analysis:
1. The case revolved around the appellant's claim that despite mentioning the brand name "Sunflex" on invoices, the goods themselves did not bear the brand name, thus entitling them to the SSI exemption. The department argued that evidence, including agreements and customer statements, proved the goods bore the "Sunflex" brand, making them ineligible for the exemption.

2. The Revenue contended that the appellant, as a franchisee manufacturer of "Sunflex" brand products, was obligated to use the brand name as per the agreement with the brand owner. They argued that even if the brand name was not physically affixed on the goods, the mere mention on invoices and the use of the brand identity for trading rendered the appellant ineligible for the exemption.

3. The Tribunal analyzed the agreement clauses between the appellant and the brand owner, emphasizing clause 3(g) which mandated the appellant to prominently identify the products with the trademark. The Tribunal concluded that the appellant's products indeed bore the "Sunflex" brand based on the agreement, customer statements, and the mention of the brand on invoices, disqualifying them from the SSI exemption.

4. Referring to the Supreme Court judgment in Australian Foods case, the Tribunal highlighted that even if the brand was not physically affixed on the product but used for selling purposes, the SSI exemption would not apply. The Tribunal found that the appellant's goods were sold with the identity of the "Sunflex" brand, aligning with the Australian Foods precedent and further supporting their decision to deny the exemption.

5. Ultimately, the Tribunal upheld the impugned order, dismissing the appeals on the grounds that the appellant's products were deemed to bear the "Sunflex" brand belonging to another person, making them ineligible for the SSI exemption as per Notification No.8/2003. The decision was based on the evidence of franchisee arrangements, agreements, customer statements, and the use of the brand name in trading practices.