2018 (2) TMI 1554 - AT - Central Excise

SSI exemption - assignment of Brand name - whether a Trade Mark/Brand Name can be assigned for a meagre consideration of ₹ 3,000/- cash? - Held that - Hon ble Supreme Court of India in the case of Commissioner of Central Excise, Goa Versus Primella Sanitary Products 2005 (4) TMI 70 - SUPREME COURT OF INDIA , has held that the person who has right over Trade Mark, can assign the right of Trade Mark to another person through a deed of assignment for any amount of consideration. With effect from 01/04/2004 appellants were entitled for benefit of N/N. 08/2003-CE - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of the assignment of Trade Mark/Brand Name for consideration.
2. Eligibility for exemption under Notification No. 08/2003-CE.
3. Confiscation of goods and imposition of penalties under Section 11AC of the Central Excise Act, 1944.
4. Adjudication of Show Cause Notices for Central Excise duty.

Analysis:
1. The main issue in the judgment was whether a Trade Mark/Brand Name can be assigned for a meagre consideration of ?3,000. The Tribunal referred to a ruling by the Hon'ble Supreme Court indicating that the right over a Trade Mark can be assigned to another person for any amount of consideration through a deed of assignment. In this case, M/s Atul Pumps Pvt. Ltd. assigned two Trade Marks to the appellant through a deed of assignment dated 01/04/2004. Therefore, the Tribunal held that the appellants were entitled to the benefit of Notification No. 08/2003-CE from 01/04/2004, setting aside the impugned orders and stating that the Show Cause Notice for the period prior to 01/04/2004 was not sustainable.

2. The appellants were engaged in the manufacture of Water Storage Tank & Waste/Dustbins and claimed exemption under Notification No. 08/2003-CE. Central Excise Officers noted that the appellants were using brand names belonging to another company, leading to the seizure of goods and subsequent adjudication through Show Cause Notices. The Original Authority ordered confiscation of goods and imposed penalties under Section 11AC of the Central Excise Act, 1944. The Commissioner (Appeals) upheld these orders. However, the Tribunal, based on the assignment of Trade Marks, allowed the appeals, setting aside the Orders-in-Appeal and granting consequential relief to the appellants.

3. The judgment also addressed the issue of confiscation of goods and imposition of penalties under Section 11AC of the Central Excise Act, 1944. The Original Authority had confiscated the goods and imposed a penalty of ?1,02,694 under Section 11AC. Similarly, in another instance, a penalty of ?4,86,123 was imposed under Section 11A(1) through a Show Cause Notice. The Commissioner (Appeals) did not interfere with these orders. However, the Tribunal, after considering the assignment of Trade Marks, set aside both Orders-in-Appeal and allowed the appeals, granting consequential relief to the appellants.

4. The adjudication of Show Cause Notices for Central Excise duty demanded for specific periods was a crucial aspect of the judgment. The Show Cause Notices were contested with arguments related to the assignment of Trade Marks. The Original Authority confirmed the demands and imposed penalties, which were upheld by the Commissioner (Appeals). However, the Tribunal, after analyzing the validity of the assignment, set aside both Orders-in-Appeal, concluding that the Show Cause Notice for the period prior to 01/04/2004 was not sustainable. As a result, the appeals were allowed, and the appellants were entitled to consequential relief as per law.