2017 (7) TMI 482 - AT - Central Excise

SSI exemption - use of Brand name of others - Held that - the brand name Extus is used by several persons - The judgment in the case of Bhalla Enterprises 2004 (9) TMI 109 - SUPREME COURT OF INDIA squarely covers the issue when the brand name is used by several persons. By respectfully following the same ratio, the denial of benefit of SSI exemption on this ground is not legal and proper. With regard to brand names Colter, Bezec, Fecit C etc., we find that the department has not been able to establish that these brand names does not belong to the appellants. In the statement of Shri R. Subramaniam, Director of M/s. Care-Med Pharmaceuticals, he states that these brand names belonged to appellant and that they purchased it. There is no evidence to establish such purchase and that the brand name belongs to M/s. Care-Med Pharmaceuticals. Thus, the department has not been able to establish the allegation that the brand name belongs to other person. Therefore, denial of benefit of SSI exemption is unjustified and the demand raised is unsustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Allegation of wrongly availing SSI exemption by using brand names of other persons.

Analysis:
The appellants were accused of wrongly availing the SSI exemption by utilizing brand names belonging to other entities. The case involved the appellants, who are manufacturers of P or P Medicines, being alleged to have used brand names such as "Extus," "Colter," "Bezec," and "Fecit C" in their products, which were claimed to belong to other companies like M/s. Zoetic Formulations and M/s. Care-Med Pharmaceuticals. The adjudicating authority confirmed duty demand, interest, and imposed penalties, which were upheld by the Commissioner (Appeals), leading to this appeal.

The appellants argued that the brand name "Extus" was used by multiple manufacturers, not exclusively owned by any single entity. They presented evidence that other companies like M/s. East West Pharma, M/s. Yashna Drugs, and M/s. Labindus Pharmaceuticals also used the brand name "Extus." The appellants contended that the allegation of using another person's brand name was baseless, especially since M/s. Zoetic Formulations withdrew their application for registration of the brand name. Citing a Supreme Court judgment, the appellants asserted that if multiple entities use the same brand name, the SSI exemption cannot be denied based on such grounds. Regarding the brand names "Colter," "Bezec," and "Fecit C," the appellants argued that there was no evidence to prove these names did not belong to them, with a statement from M/s. Care-Med Pharmaceuticals supporting their claim.

The department, represented by the Ld. AR, reiterated the findings in the impugned order, emphasizing statements from M/s. Care-Med Pharmaceuticals and M/s. Zoetic Formulations claiming ownership of the brand names in question. The department contended that since the appellants failed to provide evidence of ownership of the brand names, they were not eligible for the SSI exemption.

After considering both sides' arguments, the Tribunal found that the brand name "Extus" was used by various manufacturers, as evidenced by documents and a letter from the Drugs Controller. Citing a relevant judgment, the Tribunal held that denial of the SSI exemption based on shared brand names was not justified. Additionally, the department failed to establish that the brand names "Colter," "Bezec," and "Fecit C" did not belong to the appellants, as supported by a statement from M/s. Care-Med Pharmaceuticals. Consequently, the Tribunal set aside the impugned order, allowing the appeal and providing consequential relief as per the law.

In conclusion, the Tribunal ruled in favor of the appellants, finding the denial of SSI exemption unjustified due to the shared use of the brand name "Extus" and the lack of evidence proving that other brand names did not belong to the appellants.