2005 (3) TMI 157 - SC - Central Excise

SSI Exemption - Brand name - whether the appellant is entitled to the benefit of the Notification No. 175/86 which granted exemption to small scale industries - Held that - Merely because the owner of the brand name manufactures goods which are exempt from excise duty does not mean that such owner is entitled to the benefit of the Notification. The Notification expressly states that the use of brand name belonging to a third party is permitted only if such other person is liable for grant of exemption under the Notification. We are also unable to assume that the owner, merely because it was granted registration on 24-1-89, would have been a small scale industry during the period in question. Apart from the fact that the owner was in fact not so registered, this Court cannot be called upon to enter into an enquiry whether the owner was in fact a small scale industry during the period in question - Decided against assessee.

Summary

Issues:
Entitlement to benefit of Notification No. 175/86 for exemption to small scale industries based on the use of a brand name owned by another entity not entitled to the exemption.

Analysis:
The case revolved around the appellant's entitlement to the benefit of Notification No. 175/86, which granted exemptions to small scale industries. The appellant, engaged in manufacturing Dant Manjan under the brand name M.D.H., owned by another entity, claimed to use the brand name under a royalty agreement. The issue arose as the brand owner was not registered as a small scale industry until a specific date. The Notification allowed benefits to small scale industries provided they did not use a brand name of an entity not entitled to the exemption.

Four show cause notices were issued to the appellant, questioning the period of excise duty payment and the use of the brand name. The lower authorities, including the Assistant Collector, the Commissioner (Appeals), and the CEGAT, held that the appellant was not eligible for the exemption due to using the brand name of an entity not entitled to the benefit of the Notification.

During the appeal, the appellant did not contest the lower forum's decision regarding the brand owner's manufacturing of different goods. Instead, the appellant argued for the benefit of the Notification based on assumptions about the brand owner's excise duty liability and small scale industry status during the relevant period. However, the Court rejected this argument, emphasizing that the use of a brand name belonging to a third party is permitted only if that party is eligible for the exemption under the Notification.

The Court declined to assume the brand owner's small scale industry status during the relevant period, especially since the owner was not registered as such at that time. The judgment concluded by dismissing the appeals without any order as to costs.