2017 (9) TMI 698 - HC - Central Excise

SSI exemption - use of brand name of others - whether the petitioner is entitled for the exemption from payment of duty on goods bearing the brand name of another person cleared from their factory in terms of the relevant Notifications? - Held that - The said issue has been finally decided in the assessee s own case Kali Aerated Water Work, Salem Versus Commnr. of Central Excise, Madurai 2015 (6) TMI 226 - SUPREME COURT , where it was held that the appellant has been using his own brand name Kalimark and it belongs to the appellant - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to show cause notice demanding excise duty payment for goods removed without payment of duty. Entitlement for duty exemption on goods bearing another person's brand name cleared from factory.

Analysis:

Issue 1: Challenge to show cause notice for excise duty payment
The petitioner challenged a show cause notice issued by the respondent, alleging removal of excisable goods without payment of duty. The legal issue revolved around the petitioner's entitlement to exemption from duty payment on goods bearing another person's brand name cleared from their factory. This issue was previously decided in the petitioner's favor in a Supreme Court judgment (Kali Aerated Water Works vs. Commissioner of C.Ex., Madurai) where the petitioner's appeal was allowed. The judgment highlighted the petitioner's exclusive ownership rights over the brand names within their marketing area, as evidenced by trade mark certificates, Mutual Agreement, and other legal documents. The judgment emphasized that the appellant was the legal owner of the brand names, such as 'Kalimark,' 'Bovonto,' and 'Frutang,' in their marketing area, thereby justifying the exemption from duty payment.

Issue 2: Entitlement for duty exemption on goods bearing another person's brand name
The judgment referred to a subsequent Supreme Court decision (CCE, Hyderabad-IV v. Stangen Immuno Diagnostics) where it was established that the appellant was using their own brand name, 'Kalimark,' and was entitled to the Small Scale Industry (SSI) exemption under relevant Notification. This decision was followed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in the appellant's case, where all appeals were allowed based on the Supreme Court's ruling. Consequently, the CESTAT held that the appellants were eligible for SSI exemption under Notification No.8/03-CE dated 01.03.2003, leading to the quashing of the impugned show cause notice and allowing the Writ Petition.

In conclusion, the judgment upheld the appellant's right to exemption from duty payment on goods bearing another person's brand name, emphasizing the appellant's exclusive ownership rights over the brand names within their marketing area as the basis for granting the exemption. The legal position established by the Supreme Court and CESTAT decisions supported the quashing of the show cause notice and the allowance of the Writ Petition.