2018 (5) TMI 1297 - AT - Central Excise

SSI Exemption - use of Brand Name - it was alleged that the respondent M/s. Braco Sales Corporation are using the brand name BRACO which does not belong to them is owned by M/s. BRACO Electricals - Held that - In the SCN and the original adjudicating proceedings a lot of reliance has been placed on the statement of some buyer that the brand name Braco belongs to M/s. Braco Electricals. There is no doubt that M/s. Braco Electricals were manufacturing goods with the brand name Braco , same is the case of M/s. Braco Sales Corporation. In the market the products of both the manufacturers would be known by the said brand name. Thus mere statement of customers cannot be a reasonable basis to reach of a conclusion that the brand name is owned by M/s. Braco Electricals or M/s. Braco Sales Corporation. The Revenue has failed to substantiate the allegation that the brand name Braco belongs to M/s. Braco Electricals and has also not countered the Affidavit and the evidence produced by the respondent in this regard - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Revenue's appeal against dropping the demand.
2. Use of brand name "BRACO" by M/s. Braco Sales Corporation.
3. Small scale exemption eligibility.
4. Ownership of the brand name "BRACO."
5. Affidavits as evidence.
6. Interpretation of relevant legal precedents.

Analysis:
1. The appeal was filed by Revenue against the dropping of the demand by the Commissioner (Appeals), with M/s. Braco Sales Corporation also filing a cross-objection.

2. The main contention was the use of the brand name "BRACO" by M/s. Braco Sales Corporation, which was argued to belong to M/s. Braco Electricals, a concern owned by a different individual.

3. The eligibility for the small scale exemption was questioned due to the alleged unauthorized use of the brand name "BRACO" by M/s. Braco Sales Corporation.

4. The ownership of the brand name "BRACO" was a crucial point of dispute, with arguments presented regarding its origin and usage by different entities.

5. Affidavits were produced as evidence, with the respondent claiming ownership of the brand name based on historical usage and legal rights over the brand.

6. Legal precedents, including the decision of the Hon'ble Apex Court in Commissioner of Central Excise Vs. Grasim Industries Ltd., were cited to support arguments regarding the connection between a brand name and its product, as well as the ownership rights within a family.

In the final judgment, the Tribunal found that the Revenue failed to substantiate the claim that the brand name "BRACO" belonged exclusively to M/s. Braco Electricals. The Tribunal highlighted the lack of concrete evidence supporting the Revenue's assertion and emphasized the acceptance of the affidavits and evidence provided by the respondent. Consequently, the Revenue's appeal was dismissed, and the ownership of the brand name "BRACO" remained unresolved.