2017 (10) TMI 78 - AT - Central Excise

SSI Exemption - use of brand name - It appeared to Revenue that appellant have availed the SSI exemption wrongly in contravention of provision of Para-four of N/N. 8/2002 CE read with N/N. 8/2003 CE, which states that the exemption contained in the Notification shall not apply to specified goods bearing a brand name or trade name whether registered or not except in the case of exemption provided therein - Held that - there is no averment in the SCN and or finding that Hi-Tech brand (as used by appellant) is owned by the other manufactures, namely M/s Hi-Tech Medical Products Private Limited and M/s Aman Medical Products Private Limited - save and except making a bald allegation that the appellant company is a related person with the other two companies, no facts have been brought on record as regards common shareholding or common management etc. Further, in view of the clarification issued by the Ministry of Finance, Department of Revenue dated 01 September, 1994, it has been clarified with the example of lock manufacturers that where a brand name does not belong to any particular manufacturer, any unit is free to use any name or such name - In the facts of the present case, it is clear that the brand name Hi-Tech was not owned by any particular person or company and thus, the appellant cannot be deprived the benefit of the small-scale exemption scheme under N/N. 8/2002 read with 8/2003 CE as amended - further, the name of the appellant company is M/s Hi-Tech Syringes Private Ltd and thus putting their name on their product does not amount to use of brand name of another. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Wrong availing of SSI exemption under Notification No.8/2003 CX
- Allegations of using brand name of another person for manufacturing disposable syringes

Analysis:
The judgment revolves around the issue of whether the appellant wrongly availed the SSI exemption under Notification No.8/2003 CX. The appellant, engaged in manufacturing disposable syringes, faced allegations that they utilized the exemption in contravention of the notification provisions. Revenue contended that the exemption did not apply to specified goods bearing a brand name or trade name of another person. It was observed that the appellant had a special relationship with other manufacturers and samples of their syringes were found identical to those of another company. The appellant's representatives admitted awareness of using the Hi-Tech brand, but claimed exemption benefits due to being located in a rural area, which was disputed by Revenue. The show cause notice demanded Excise Duty and Cess, along with penalties, for alleged wrongful exemption availing.

In response, the appellant contested the notice, seeking legible document copies for defense preparation. Despite adjudication being done ex parte, the appellant argued that they did not use another person's brand name and were eligible for the SSI exemption. They emphasized that the brand name should not belong to any other person, not necessarily to the SSI manufacturer. The appellant maintained proper record-keeping and compliance, with no evidence of misdeclaration or suppression. The appellant distinguished their case from precedent rulings involving brand ownership issues, highlighting that the Hi-Tech brand was not owned by any specific entity.

The Tribunal analyzed the facts and contentions, finding that the rulings cited by Revenue were not applicable to the present case. It noted the absence of evidence proving ownership of the Hi-Tech brand by other manufacturers and highlighted a Ministry of Finance clarification stating that units could use brand names not belonging to any specific manufacturer. The Tribunal concluded that the appellant, using their own company name on products, did not violate the exemption criteria. Consequently, the appeals were allowed, setting aside the impugned orders and granting consequential benefits to the appellant.