2018 (9) TMI 84 - AT - Central Excise

SSI Exemption - use of Brand Name - Held that - The brand name BESTON-S is registered in the name of Mr. Balram Nathani, the main Director and shareholder in the appellant company along with other family members - the denial of SSI exemption on the ground of use of brand name of another person is unjustified and untenable - SSI exemption cannot be denied. Valuation - MRP based Valuation - Section of 4A of CEA - Held that - The adoption of MRP from the website of BESTON-S brand is nowhere justified in the light of the market enquiry conducted by the Department which supports the quotations submitted by the Appellant of the comparable brand - the variation made on account of valuation is also untenable. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Denial of SSI benefit to the appellants.
2. Correctness and justification of the valuation adopted by Revenue for valuing the goods cleared by the appellants.

Issue-wise Detailed Analysis:

1. Denial of SSI Benefit:

The primary issue was whether the SSI benefit was rightly denied to the appellants. The Revenue conducted a search and found that the appellant was using the brand name "BESTON-S," which was similar to "BESTON," a registered trademark of another entity. The appellant's application for trademark registration was refused by the Trademark Authority. The Revenue argued that the appellant was manufacturing and clearing goods under another's trademark, thus disqualifying them from SSI exemption.

However, the appellant provided a certificate of registration granted under the Trade Marks Act, 1999, showing the brand name "BESTON-S" registered in favor of Shri Balram Nathani. The Tribunal referenced a similar case, Sanjay Aggarwal CCE versus Sanjay Aggarwal 2017 (345) ELT 568, where the benefit of exemption was not denied if the brand name was registered in the name of the Managing Director. The Tribunal concluded that the brand name "BESTON-S" was indeed registered in the name of Mr. Balram Nathani, thus the SSI exemption could not be denied on this ground.

2. Correctness and Justification of Valuation:

The second issue was whether the valuation adopted by the Revenue was correct and justified. The Revenue adopted the MRP of similar branded goods like Philips and Samsung for valuation purposes, which the appellant contested as irrational and unjustified. The Adjudicating Authority conceded that the original valuation was incorrect and instead relied on the retail sale price available on the website for "BESTON-S," which was ?2350/-, and other market inquiries indicating a price of ?1350/-.

The Tribunal found that adopting the MRP from the website was not justified in light of the market inquiry and the quotations submitted by the appellant. The Tribunal held that the valuation variation made by the Revenue was untenable and set it aside.

Conclusion:

The Tribunal set aside the impugned order, allowing the appeal filed by the appellants with consequential reliefs, if any. The question of the extended period of limitation was left open. The SSI exemption was granted, and the valuation adopted by the Revenue was deemed unjustified.