2018 (12) TMI 432 - AT - Central Excise

SSI Exemption - denial on the ground that assessee was using brand name of third party - Extended period of limitation - Held that - While filing the declaration under Rule 173B of Central Excise Rules, 1944, the assessee has declared that they are using the brand name MEFA which is their company s name - Therefore, it cannot be alleged that the assessee has not declared the fact that of using the brand name of third party. In that circumstance, the Ld. Commissioner has rightly dropped the demand pertaining to the extended period of limitation. Use of brand name - case of appellant is that vide deed of assignment dt.5.10.2003, the assigner has assigned its rights to use trade mark to the assessee - Held that - The assessee has placed on record assignment deed as well as lease deed in favour of use of said brand name, plant, machinery of M/s.Metal Fabrics India Pvt.Ltd. although the said lease deed/assignment deed has not been registered - the assessee is entitled to claim the benefit of SSI exemption notification as the assessee is not using the brand name of third party - benefit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues: Appeal against impugned order regarding SSI exemption, brand name usage, duty demand, penalties, and extended period of limitation.

Analysis:
1. Extended Period of Limitation: The case involved a dispute regarding the extended period of limitation for duty demand. The appellant argued that they had been using the brand name "MEFA" since 1981 and had declared it under Rule 173B of Central Excise Rules. The Commissioner dropped the demand for the extended period, citing the declaration. The Tribunal upheld this decision, stating that the appellant had disclosed the use of the brand name, thus dismissing the Revenue's appeal.

2. Brand Name Usage and SSI Exemption: The appellant presented an assignment deed and lease deed allowing them to use the brand name, plant, and machinery of another company. Although these deeds were not registered, the Tribunal referred to a previous case to support the appellant's claim for SSI exemption. The Tribunal concluded that since the appellant was not using a third party's brand name, they were entitled to avail the SSI exemption benefit.

3. Duty Demand and Penalties: The Tribunal held that if the appellant exceeded the SSI exemption limit, they would be liable to pay duty with interest. However, as there was no malafide intent on the appellant's part, no penalties were imposed. The appeals filed by the appellant were disposed of, and the appeals by the co-appellants were allowed, resulting in a favorable decision for the appellant and co-appellants.