2017 (6) TMI 681 - AT - Central Excise

SSI exemption - use of brand name of others - Department was of the view that the appellants were using the brand name belonging to FCF in the products manufactured and cleared by them - the department has not been able to establish that the alleged brand name belonged to FCF - Held that - The letter addressed by the Managing Partner of FCF to Trademark registry clearly shows that they have withdrawn their application for registration of trademark. Further, the letter written by the Trademark registry to department evidences that though FCF had applied for registering the trademark in their name, they had not remitted the required fee. When an application has not been presented with the requisite fee, in effect, the application has to be considered as not presented at all - the managing partner of FCF has filed an affidavit stating that the alleged trademark does not belong to them and that the appellants are the absolute owners of the said trademark - department has failed to establish that the alleged trademark belongs to FCF. Extended period of limitation - Held that - the declaration filed by the appellant gives a detail description of their marketing pattern - suppression cannot be alleged against the appellant and the demand raised invoking the extended period is unsustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Allegation of wrongly availing SSI exemption by using another brand name.

Analysis:
The case involved the appellant allegedly availing SSI exemption while clearing goods manufactured with a different brand name. The department claimed that the appellant used the brand name of another entity, leading to duty demand, interest, and penalty. The original authority dropped the proceedings due to the department's failure to prove ownership of the alleged brand name. The Commissioner (Appeals) upheld the duty demand, interest, and penalty, prompting the appellant's appeal.

The appellant argued that they had drug licenses for products with their brand names, refuting the department's claims. They highlighted the withdrawal of the trademark registration application by the other entity and an affidavit stating no ownership of the disputed trademark. The appellant emphasized that without proving ownership, denying SSI exemption was unjustified. Legal precedents were cited to support their arguments.

The department contended that the appellant used the other entity's logo on goods, indicating a different brand name. They argued that the trademark belonged to the other entity, despite withdrawal of the registration application and the affidavit. The Commissioner (Appeals) viewed the appellant's actions as suppression of facts, justifying the extended period for the show cause notice.

The Tribunal analyzed the evidence, noting the withdrawal of the trademark registration application and the affidavit disclaiming ownership. Citing relevant case law, the Tribunal emphasized the necessity for the department to establish ownership of the disputed trademark. The appellant's compliance with marketing disclosures further supported their case. Consequently, the Tribunal ruled in favor of the appellant on both merit and limitation grounds, setting aside the impugned order and allowing the appeal with appropriate relief.

In conclusion, the Tribunal's detailed analysis focused on the ownership of the brand name, the withdrawal of the trademark registration application, and the appellant's compliance with marketing disclosures. Legal precedents and the necessity for the department to prove ownership were crucial in the Tribunal's decision to rule in favor of the appellant on both merit and limitation grounds.