2006 (2) TMI 172 - SC - Central Excise

SSI Exemption - Brand name - whether the appellants are eligible for the small scale exemption under Notification No. 1/93-C.E., dated 28-2-1993 as amended in respect of the SANT brand non-ISI/non-IBR grade cocks and valves manufactured and sold by them - Held that - Appellant was served with a Show Cause Notice dated 14-9-1965 for the period April, 1995 to July, 1995 stating therein that the appellant had manufactured and cleared goods valued at Rs. 61,87,472/- during the period April, 1995 to July, 1995 by affixing brand name SANT after discharging slab wise rate of duty at the rate of 5% and 10% ad valorem under small scale exemption whereas such branded goods were liable to duty at the rate of 15% ad valorem. That the benefit of exemption of Notification No. 1/93-C.E., dated 28-2-1993, as amended, was not available to the specified goods bearing a brand name or trade name (registered or not) of another person - The Tribunal has held that the brand name SANT continues to be registered in the name of M/s. Sant Brass Metal Works and, therefore, the appellant will not be entitled to the exemption under Notification No. 1/93-C.E. This is so because the appellant has only the limited right to use the brand name under the registered trade mark. The ownership of the trade mark had not been transferred to the appellant - No infirmity in impugned order - Decided against assessee.

Summary

Issues:
Interpretation of small scale exemption under Notification No. 1/93-C.E. for specified goods bearing a brand name of another person.

Analysis:
The case involved a statutory appeal under Section 35L(b) of the Central Excise Act, 1944 against a Final Order where the Customs Excise Gold Control Appellate Tribunal rejected the appeal filed by the appellant. The main question was whether the appellants were eligible for the small scale exemption under Notification No. 1/93-C.E. for 'non-ISI/non-IBR grade cocks and valves' bearing the brand name 'SANT'. The Notification specified that the exemption would not apply to goods bearing a brand name of another person. The appellant, a partner in a dissolved partnership, set up a new entity and started producing goods under the 'SANT' brand. The appellant was served with a Show Cause Notice for allegedly affixing the 'SANT' brand name on goods not eligible for the small scale exemption. Despite filing objections and appeals, the Assessing Authority confirmed the demand, which was upheld by the Commissioner (Appeals) and the Tribunal.

The Tribunal held that the brand name 'SANT' remained registered under the original partnership, and the appellant did not have ownership of the trademark. Therefore, the appellant was deemed ineligible for the exemption under Notification No. 1/93-C.E. The Tribunal's decision was based on the fact that the appellant only had a limited right to use the brand name under the registered trademark, with no ownership transfer. Consequently, the Supreme Court found no fault in the Tribunal's judgment and dismissed the appeals without any order as to costs.