2018 (11) TMI 819 - AT - Central Excise

SSI Exemption - use of brand name of others - case of Revenue is that since these diaries have logo of LIC printed on them, the exemption under notification No 8/2003-CE was not available in respect of these products - Held that - The use of brand name should in the course of trade in the goods under consideration. If the same is not in the course of trade then benefit of the exemption contained in this notification cannot be denied - In the present case LIC Logo printed on diaries do not establish any connection between the goods and the logo, hence the same cannot be said to be in the course of trade. Further it cannot be said that LIC is in trade of selling the LIC diaries. Thus without establishing such connection between the goods and logo printed on the diaries benefit of exemption under Notification No 8/2003-CE cannot be denied - benefit of notification remain allowed - appeal allowed - decided in favor of appellant.

Issues:
1. Appeal against the order confirming duty demand and penalty under the Central Excise Act, 1944.
2. Applicability of exemption under notification No 8/2003-CE for branded diaries of Life Insurance Corporation.
3. Connection between the goods and logo printed on the diaries to establish the course of trade.
4. Interpretation of brand name provision in the general SSI Scheme.

Detailed Analysis:
1. The appeal challenged the Order in Appeal confirming the demand of duty and penalty imposed by the Commissioner (Appeals) Mumbai Zone-1 under the Central Excise Act, 1944. The appellant, a manufacturer of table diaries and printed materials, faced the demand of duty for clearing branded diaries of Life Insurance Corporation without payment. The investigation revealed the duty due on diaries supplied to LIC, leading to the demand of duty, interest, and penalty under the Central Excise Act, 1944.

2. The main issue revolved around the applicability of exemption under notification No 8/2003-CE for the branded diaries of Life Insurance Corporation. The appellant contended that the exemption should apply as LIC is not a manufacturer or trader of diaries, and the logo on the diaries does not establish a connection between the goods and the logo. The appellant argued that the logo was printed as required by LIC, which is not in the trade of selling diaries but is engaged in insuring lives, making the logo a house mark and not a brand name.

3. The tribunal analyzed the requirement for establishing a connection between the goods and the logo printed on the diaries to determine if it was in the course of trade. Referring to Circular No. 71/71/94-CX, it was highlighted that the brand name provision would not apply if there was no trade of such goods. The tribunal found that the LIC logo printed on the diaries did not establish a connection in the course of trade, as LIC was not in the business of selling diaries, thereby entitling the appellant to the exemption under Notification No 8/2003-CE.

4. The interpretation of the brand name provision in the general SSI Scheme was crucial in determining the applicability of the exemption. Citing previous tribunal decisions, the bench concluded that since the diaries manufactured for LIC were not traded by LIC, the appellant was entitled to the exemption under Notification No 8/2003-CE. The tribunal allowed the appeal and set aside the order of the Commissioner (Appeals) based on the established interpretation of the brand name provision and the absence of a trade connection between the goods and the logo printed on the diaries.

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