2017 (10) TMI 610 - AT - Central Excise

SSI Exemption - use of Brand Name of other person - brand name coined by the appellant and its marketing agencies - Held that - Since it is not disputed that the coining of the brand name together by the appellants and the customers, it is the bounden duty of the department to establish that the appellant has been using the brand name belonging to another. The marketing agencies have produced letters stating that they do not claim any ownership of such brand name - it cannot be held that the appellant has been clearing goods with the brand name belonging to another person. With regard to issue of parallel invoice, the amount involved is only ₹ 13,219/- therefore, the appellant would come within the SSI exemption limit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility for SSI exemption due to the use of brand names belonging to other persons.
2. Liability for excise duty on parallel invoices.

Analysis:

Issue 1:
The appellants, engaged in manufacturing food supplements, were accused of not being eligible for the SSI exemption as they were using brand names belonging to their customers. The department alleged that the appellant had used brand names of another person, leading to a duty demand. However, the appellant argued that the brand names were jointly coined by them and the customers, with marketing agencies not claiming ownership. Documents from the marketing agencies supported the appellant's claim. The tribunal noted that the burden of proof lay on the department to establish the ownership of the brand names. Citing precedents, including Mukur Pharmaceuticals Pvt. Ltd. and others, it was held that the onus was on the department to prove that the brand name belonged to another person. Consequently, the demand based on the misuse of brand names was deemed unsustainable, and the appeal was allowed.

Issue 2:
The second issue revolved around the appellant's use of parallel invoices, leading to a demand of excise duty. The appellant contended that the amount involved was minimal, only &8377; 13,219, falling within the SSI exemption limit. The tribunal concurred with this argument, stating that the appellant would qualify for the SSI exemption due to the insignificant amount in question. As a result, the demand related to parallel invoices was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the tribunal ruled in favor of the appellant, finding the demand based on the misuse of brand names belonging to other persons unsustainable and setting aside the excise duty demand related to parallel invoices due to falling within the SSI exemption limit.