2007 (8) TMI 237 - HC - Central Excise

Apart from the logo of the assessee, logo of marketing firm was also affixed on the packing test which has to be satisfied in order to get benefit of not. 8/98 weren t satisfied as logo of marketing firm is also fixed SSI exemption not available

Summary

Issues:
Interpretation of Small Scale Exemption under Notification No.8/98-CE regarding the use of brand name/logo of another person on goods for quality control purposes.

Detailed Analysis:
1. The appeal filed by the revenue questioned whether the Tribunal was correct in holding that marking the logo of the trader for quality control purposes does not disqualify the goods from the Small Scale Exemption under Notification No.8/98-CE, despite provisions stating that goods bearing another person's brand name/trade name are ineligible for the exemption.

2. The case involved a search at the premises of a company engaged in manufacturing brand goods for another company. A show cause notice was issued, leading to an order confirming the notice. The Commissioner of Central Excise (Appeals) later allowed the appeal, which the Revenue challenged before CESTAT, resulting in the Tribunal's decision favoring the appellant.

3. The Tribunal's decision was influenced by a previous judgment where it was held that marking a logo for quality control purposes does not affect the Small Scale Exemption. The Revenue's appeal was based on the argument that the goods contained logos of both the manufacturer and the marketing firm, which should disqualify them from the exemption.

4. During the appeal hearing, the revenue's counsel referred to a court admission regarding the use of a brand name/logo by a small-scale industrial unit manufacturing goods for a marketing company. The court considered whether such usage affected the eligibility for exemption under Notification 8/98-CE.

5. The revenue relied on judgments from the Supreme Court and the Madras High Court to support their contention that affixing another person's brand name/logo on goods makes them ineligible for exemption. The case involved prominently marked words on the products and the contention that the logos were placed inconspicuously for quality control.

6. The Supreme Court's decision in a similar case emphasized that using a trade name of another company to indicate a connection between the product and that company disqualifies the goods from the exemption. Similarly, a Madras High Court judgment highlighted that affixing a monogram or label of another person on products owned by them renders the exemption inapplicable.

7. The court concluded that the presence of both the manufacturer's and marketing firm's logos on the goods did not satisfy the necessary criteria for claiming the exemption. Therefore, the appeal by the revenue was allowed, setting aside the Tribunal's decision and restoring the original order.

8. The judgment answered the question of law in favor of the Revenue, emphasizing that the goods with logos of both the manufacturer and the marketing firm were not entitled to the Small Scale Exemption. The decision highlighted the importance of meeting the specified criteria for exemption eligibility.

This detailed analysis provides a comprehensive overview of the legal judgment, addressing the issues involved and the key arguments presented by the parties.