2017 (6) TMI 416 - AT - Central Excise

SSI exemption - use of brand name of others - it has been presumed by the Revenue that the Emmbros brand name belongs to the distributors which is factually incorrect as during the course of investigation, the distributor itself has stated that the brand name Emmbros does not belong to them - Held that - the allegation of the Revenue is only on assumptions and presumptions without any documentary evidence. In that circumstances, there is no infirmity in the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against granting of SSI exemption to respondents under Notification No. 08/2003-CE.
2. Allegation of manufacturing goods using brand name of another person without central excise registration.
3. Investigation finding brand names such as S.R.B.L, RACER, and EMBROS belonging to distributor.
4. Dispute over entitlement to SSI exemption under Notification No. 08/2003.
5. Observations by Ld. Commissioner (Appeals) regarding brand ownership and denial of exemption.

Analysis:
1. The appeal was filed by the Revenue against the order granting SSI exemption to the respondents. The Revenue alleged that the respondents were manufacturing Universal Joint Cross (Auto Parts) using brand names of other persons without central excise registration, thus contravening Central Excise Rules, 2002. The investigation revealed brand names like S.R.B.L, RACER, and EMBROS were used by the respondents, leading to the allegation that the distributor owned these brand names, making the respondents ineligible for SSI exemption under Notification No. 08/2003-CE.

2. The Ld. AR argued that the brand name "Emmbros" belonged to the distributor, supported by findings of packing material and printed material bearing the mark "Emmbros" from the distributor's custody. However, during the investigation, the distributor clarified that the brand name "Emmbros" did not belong to them, contradicting the Revenue's presumption. The Ld. Commissioner (Appeals) also noted statements from involved parties denying brand ownership by the distributors, further weakening the Revenue's case.

3. The Ld. Commissioner (Appeals) emphasized that to deny exemption under the Small Scale exemption Notification, it was crucial to prove that the brand names used by the respondents belonged to other persons. Statements from the partner of the respondent and the director of one of the distributors indicated that the disputed brands did not belong to the distributors. The Revenue's allegations were based on assumptions and presumptions without concrete documentary evidence, leading to the dismissal of the appeal and upholding of the impugned order.

4. The judgment highlighted the importance of factual evidence in determining brand ownership for the purpose of denying SSI exemption under Notification No. 08/2003-CE. The observations by the Ld. Commissioner (Appeals) regarding the lack of documentary evidence to support the Revenue's allegations played a crucial role in the decision to uphold the impugned order and dismiss the Revenue's appeal.