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2009 (4) TMI 174 - AT - Central ExciseEligibility of the assesses to the benefit of SSI exemption in terms of Notification No. 1/93-C.E., dt. 28-2-93 and Notification No. 8/98-C.E., dt. 2-6-98. - The notices issued to the respondents proposed denial of the benefit on the ground that the brand name Spear with symbol and numeral 27 and Torch belonged to SFPL and therefore, the respondents (SFI), a partnership firm are not eligible to the benefit of SSI exemption - The fact that there cannot be any objection to the use of the brand name of SFPL by SFI since SFPL was the major partner in SFI, does not in any way detract from the ownership of the brand name by SFPL who is an independent legal entity, namely, a limited company. - SFPL had stopped manufacturing activities using the brand name also does not make the brand name one of SFI - benefit of SSI exemption not allowable
Issues:
Eligibility of assesses for SSI exemption under Notification No. 1/93-C.E. and Notification No. 8/98-C.E. based on the ownership of the brand name "Spear with symbol and numeral 27" and "Torch" by a limited company, SFPL, and its use by a partnership firm, SFI. Analysis: The common issue in the appeals was the eligibility of the assesses for the benefit of SSI exemption under specific notifications. The goods in question were fireworks, and the period of dispute varied across appeals. The notices proposed denial of the benefit due to the brand name ownership by SFPL and its use by SFI. The Commissioner (Appeals) held that SFI, being a partnership firm with SFPL as a major partner, was eligible for the exemption as SFPL had control over SFI and the brand name was not used by any other entity. The Commissioner emphasized that the denial of SSI exemption based on the brand name was not sustainable due to the partnership structure and the absence of brand name use by others. The Commissioner found no suppression of facts or willful contravention, leading to the conclusion that the demand of duty and penalty was not justified. Regarding the ownership of the brand name, the Tribunal noted that SFPL, as a separate legal entity, owned the brand name, and the cessation of manufacturing activities by SFPL did not transfer the brand name to SFI. The Tribunal highlighted that there was no evidence of an assignment of the brand name from SFPL to SFI, and the brand name unequivocally belonged to SFPL. As SFI used the brand name of SFPL on its goods, the Tribunal concluded that SFI was not entitled to the SSI exemption under the relevant notifications. Consequently, the Tribunal set aside the orders granting SSI exemption to the assesses and allowed the appeals of the Revenue. The cross objection filed by the assesses in response to the Revenue's appeals was dismissed. In conclusion, the judgment centered on the ownership of the brand name and its implications for the eligibility of assesses for SSI exemption. The Commissioner's decision in favor of the assesses was overturned by the Tribunal based on the clear ownership of the brand name by SFPL and its use by SFI, leading to the denial of SSI exemption. The legal analysis focused on the partnership structure, brand name ownership, and the absence of brand name transfer, ultimately resulting in the rejection of the assesses' claim for the exemption.
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