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2018 (4) TMI 1087 - AT - Central ExciseSSI Exemption - use of brand name - allegation in the show cause notice is that the brand name RIAT was registered in the name M/s. Riat Machine Tools, which was a family concern - Held that - In terms of the family settlement deed, M/s. Riat Machine Tools relinquished their right to use the said trade mark on Centreless Grinding Machines and Surface Grinding Machines, if manufactured by them - main ground of the department is that the above family settlement deed was not mentioned in show cause notice nor mentioned during three statements of the proprietor of the respondent but was produced afterwards before the adjudicating authority as well as first appellate authority. As rightly held by the Commissioner (Appeals), the terms of the family agreement have clearly ruled out any scope of indicating a connection between the goods manufactured by the respondents bearing the Brand Name RIAT and M/s. Riat Machne Tools, who were also be user of the same Brand Name but on different goods. Appeal dismissed - decided against Revenue.
Issues:
1. Interpretation of family settlement deed in relation to the use of a brand name. 2. Consideration of the timing of the production of the family settlement deed. 3. Verification of the authenticity of the family settlement deed. 4. Determination of the impact of the family settlement deed on the case. 5. Assessment of the Commissioner (Appeals) decision in light of the family settlement deed. Detailed Analysis: 1. The case involved a dispute where the respondents, manufacturers of Centreless Grinders and Surface Grinders, were availing SSI exemption but were found to be using the brand name "RIAT" registered under a different entity. The Revenue issued a show cause notice resulting in a demand confirmation of &8377; 30,80,723/- along with penalties. The respondents appealed the decision of the adjudicating authority, which was subsequently set aside by the Commissioner (Appeals), leading to the Revenue filing an appeal challenging this decision. 2. The Revenue argued that the Commissioner (Appeals) erred by giving weight to a family settlement deed produced by the respondents at a later stage, emphasizing that it was not mentioned in earlier documents such as the partnership deed and retirement deed. The production timing of the family settlement deed was questioned as an afterthought by the Revenue. 3. The Tribunal examined the family settlement deed dated 11.4.2002, which transferred the rights of the brand name "RIAT" for specific machines from M/s. Riat Machine Tools to the respondents. The authenticity of the document was not disputed, and no allegations of forgery were made. The Tribunal noted that the retirement deed and the family settlement deed served different purposes, with the latter specifically addressing the transfer of trademark rights. 4. The Tribunal found that the family settlement deed effectively relinquished M/s. Riat Machine Tools' right to use the "RIAT" trademark on certain machines, granting exclusive usage rights to the respondents for those specific products. The agreement prohibited the respondents from using the trademark on any other goods they manufactured. The Tribunal highlighted the clear delineation of rights established by the family settlement deed. 5. Upholding the decision of the Commissioner (Appeals), the Tribunal concluded that the terms of the family settlement deed precluded any connection between the goods produced by the respondents under the "RIAT" brand name and those of M/s. Riat Machine Tools. The Tribunal found no flaws in the Commissioner (Appeals) decision, ultimately dismissing the Revenue's appeal based on the established rights outlined in the family settlement deed.
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