2017 (4) TMI 27 - AT - Central Excise

SSI exemption - use of brand name of others - Held that - the brand name Naughty is in the name of Shri Sanjay Agrawal, one of the Directors of M/s. Naughty Foods Pvt. Ltd. The said brand name was registered as manufacturer and merchant in the name of Sanjay Agrawal. He was using the above brand name earlier as proprietor of M/s. Naughty Foods. The Commissioner (Appeals) recorded that Shri Sanjay Agrawal being owner of the brand name has used the said brand name in respect of the goods manufactured in the unit in which he was Managing Director - exemption allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against order of Commissioner (Appeals), Indore
- Eligibility for SSI exemption based on brand name usage
- Ownership of brand name "Naughty"
- Application of Tribunal's decisions in similar cases

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI was filed by the Revenue against the order of the Commissioner (Appeals), Indore dated 12-7-2012. The case involved M/s. Naughty Foods Pvt. Ltd., engaged in the manufacture of confectionery items with the brand name "Naughty." The Revenue initiated proceedings to demand Central Excise duty and penalties after a verification by Central Excise Intelligence officers in March 2010. The original authority confirmed a duty of &8377; 12,39,758/- on M/s. Naughty Foods Pvt. Ltd. and imposed penalties. Additionally, a penalty of &8377; 1 lakh was imposed on Shri Sanjay Agrawal, the Managing Director. The Commissioner (Appeals) set aside the original order, leading to the Revenue's appeal.

During the hearing, the Revenue argued that M/s. Naughty Foods Pvt. Ltd. was not eligible for Small Scale Industry (SSI) exemption as they started using the brand name "Naughty" in 2008, which belonged to another person. It was highlighted that Shri Sanjay Agrawal, a Director of M/s. Naughty Foods Pvt. Ltd., owned the brand name "Naughty" and had used it previously as a proprietor. The Commissioner (Appeals) noted this ownership and usage, referencing Tribunal decisions in similar cases. The Tribunal found the Commissioner's decision to be in line with established precedents and dismissed the Revenue's appeal, as the original authority had failed to follow the relevant rulings only because appeals against those rulings were pending.

In conclusion, the Tribunal upheld the Commissioner (Appeals)'s decision, emphasizing the ownership of the brand name "Naughty" by Shri Sanjay Agrawal and the correct application of Tribunal decisions. The appeal by the Revenue was deemed to lack merit and was subsequently dismissed.