2017 (3) TMI 1086 - AT - Central Excise

SSI exemption - use of Brand name which was assigned vide oral contract - manufacture of batteries - demand on the ground that they have manufactured batteries with the brand name of others - brand name assigned - benefit of N/N. 8/2003-CE dated 01/03/2003 - Held that - the persons to whom the said brand names belong have stated that they have assigned the brands in favour of respondent for the manufacture and supply of batteries to them - It is also recorded that even in the absence of written agreement the submission of the owner of the brand name is acceptable as there is no need for written agreement in all cases - registration of assignment cannot be put as a condition to establish the fact of assignment - benefit allowed. Regarding the other brand names which are unregistered, alleged to have belonging to other persons, we note that the evidences submitted did not categorically establish the ownership of such brands with any other specific person. The impugned order examined in detail the scope of these names and also as to fact whether these can be called as brand names. It is recorded that TURBOTEK is the name representing to a trading firm and not identified as brand name of any product and in fact the name was registered later with one of the respondent and the same was not objected to by any other person. Similarly, the impugned order recorded that names SUPER, MAGIC and EMRALD were also affixed on the goods when cleared to specific dealers as per the request of those dealers. There is no evidence to show that these names were brand names belonging to these dealers. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability to Central Excise duty on manufacture of batteries with brand names of others.
2. Exemption under Notification 8/2003-CE dated 01/03/2003.
3. Assignment of registered brand names.
4. Use of unregistered brand names.
5. Interpretation of brand names MAGIC, SUPER, EMRALD, TURBOTEK.

Analysis:
1. The appeals were filed by Revenue against orders passed by Commissioner (Appeals) regarding the liability of two companies manufacturing batteries with brand names of others to Central Excise duty. The issue revolved around the exclusion from the benefit of Notification 8/2003-CE dated 01/03/2003 due to the usage of brand names of other persons. The Revenue alleged that the companies manufactured batteries using brand names such as "SEGA," "KALINGA," "TURBOTEK," "MAGIC," "SUPER," "EMRALD," and "NIKE" belonging to different individuals, thereby disqualifying them from the exemption.

2. The Revenue contended that the assignment of brand names was not properly evidenced by registration, leading to the denial of small scale industry exemption. Specifically, regarding the brand name TURBOTEK, the Revenue argued that it belonged to a specific entity and not the respondent. The Revenue also claimed that brand names MAGIC, SUPER, and EMRALD were owned by various dealers who requested the manufacturing of batteries with those specific names, thus disqualifying the batteries from SSI exemption.

3. The Counsel for the respondents argued that the registered brand names were duly assigned by mutual agreement, which did not require registration with Trade Mark Authorities for Central Excise purposes. They relied on the decision of the Hon'ble Supreme Court to support their stance. Regarding TURBOTEK and other names, they asserted that these were generic names not attributable to any particular person, and the names were used for tracking goods rather than as brand names belonging to specific individuals.

4. The Tribunal examined the evidence and arguments presented by both sides. It noted that the assignment of registered brand names to the respondents was accepted based on the statements of the brand owners, even without a written agreement. Citing legal precedents, the Tribunal held that non-registration of assignments does not affect the eligibility for small scale exemption. The Tribunal found the Commissioner (Appeals)'s decision on this issue to be valid.

5. Concerning the unregistered brand names like MAGIC, SUPER, EMRALD, and TURBOTEK, the Tribunal observed that the evidence did not conclusively establish ownership by specific individuals. It determined that these names were used for tracking goods and facilitating rectification, rather than functioning as brand names. The Tribunal upheld the Commissioner (Appeals)'s findings on these unregistered brand names and dismissed the appeals, along with the Cross Objections.

In conclusion, the Tribunal upheld the Commissioner (Appeals)'s decision, emphasizing the importance of proper evidence and legal precedents in determining liability to Central Excise duty based on brand names used in manufacturing batteries.