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2023 (5) TMI 292 - AT - Central ExciseSSI Exemption - use of brand name of others (defunct company) - affixing the brand name NUCOR WELD and KEMTRODE to the manufactured welding electrodes - ineligible for benefit of exemption Notification No.8/99-CE dated 28.2.1999 - HELD THAT - A plain reading of the Notification makes it crystal clear that the brand name or trade name need not be registered one but use of such symbol, monogram, label, signature or invented word or writing prescribed under the said explanation be with an objective to indicate a connection in the course of trade between such specified goods and some person using such names or mark with or without indication of the identity of that person - In the present case, is it an undisputed fact that the companies which were using the trade mark NUCOR WELD and KEMTRODE since 1987 became defunct in 1997 and by way of MoU and Deed of Assignment, authorised the present appellants to use the brand name for which the appellant also made an application for registration of the said brand name in their favour with the trade mark authorities in the year 1999 before using the same brand mark. The trade mark authority ultimately registered the brand name NUCOR WELD and KEMTRODE in their favour subsequently in the year 2004 and 2006. The parties to the brand name never contested about Assignment Deed nor signing of the MoU in favour of the appellant for use of the said brand name. Following the ratio of the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BANGALORE VERSUS M/S. OTTO BILZ (INDIA) PVT. LTD. 2015 (10) TMI 2149 - SUPREME COURT and COMMNR. OF CENTRAL EXCISE, HYDERABAD IV VERSUS M/S. STANGEN IMMUNO DIAGNOSTICS 2015 (6) TMI 155 - SUPREME COURT ; brand name NUCOR WELD and KEMTRODE used by the appellant cannot be said to have been belonging to others establishing the connection of trade, thereby make them ineligible to the benefit of the said Notification No.8/99-CE. Appeal allowed.
Issues:
- Claim of SSI exemption under Notification No.08/99-CE dated 28.2.1999 - Allegation of affixing brand names belonging to others - Denial of benefit of exemption and recovery of duty - Upholding of personal penalty under Rule 209A Analysis: Claim of SSI exemption under Notification No.08/99-CE dated 28.2.1999: The appellants, engaged in manufacturing welding electrodes, claimed the benefit of SSI exemption under Notification No.08/99-CE dated 28.2.1999 due to their total clearances being less than Rs.50 lakhs during a specific period. The dispute arose when a show-cause notice was issued for allegedly affixing brand names, "NUCOR WELD" and "KEMTRODE," belonging to defunct companies, leading to a demand for duty recovery. The Commissioner (A) partially allowed the appeal, setting aside penalties on other companies but upholding the denial of exemption and duty recovery along with personal penalty under Rule 209A on the Managing Director. Allegation of affixing brand names belonging to others: The appellant contended that the brand names were acquired through a Memorandum of Understanding (MOU) and Deed of Assignment from defunct companies, allowing them to use the names pending trademark registration. The appellant argued that since the original companies were defunct and had authorized the use of the brand names, they were entitled to the exemption under Notification No.08/99-CE dated 28.2.1999. The appellant cited legal precedents and presented registration certificates from the Trade Marks Authority to support their claim. Denial of benefit of exemption and recovery of duty: The Revenue argued that the use of brand names belonging to others made the appellants ineligible for the SSI exemption. They contended that even if the original companies were defunct, the use of others' brand names disqualified the appellants from availing the exemption. Legal references were made to support the Revenue's stance. Upholding of personal penalty under Rule 209A: The Tribunal analyzed the meaning and scope of brand names as per Notification No.08/99-CE dated 28.2.1999, emphasizing the need for a connection in the course of trade between specified goods and the person using the brand name. It was noted that the appellants had obtained authorization to use the brand names through legal agreements and subsequent trademark registrations. Relying on legal precedents, the Tribunal concluded that the appellants were not using brand names belonging to others in a manner that would disqualify them from the exemption. As a result, the impugned order was set aside, and the appeals were allowed with consequential relief, if any, as per law.
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