2002 (10) TMI 114 - AT - Central Excise

Summary

Issues Involved:
1. Availability of small scale exemption to a manufacturer using a brand name similar to another person's brand name.
2. Denial of small scale exemption to a manufacturer using another person's brand name when the goods are different from those of the brand name owner.

Summary:

Issue 1: Availability of Small Scale Exemption for Similar Brand Names
The Tribunal examined whether the benefit of small scale exemption is available to a manufacturer who manufactures and clears excisable goods bearing a brand name similar to another person's brand name. The case of M/s Fine Industries was discussed, where Diesel Engine parts were cleared under the brand name 'BHALLA FINE', similar to 'BHALLA' owned by M/s. United Foundry and Engineering Works. The Adjudicating Authority allowed the SSI exemption for Diesel Engine parts under 'BHALLA FINE' but denied it for Lubricating Pumps under 'BHALLA'. The Commissioner (Appeals) upheld this decision. The Tribunal noted that the similarity of brand names is a question of fact that needs to be settled by the regular Bench before deciding on the eligibility for exemption.

Issue 2: Denial of Small Scale Exemption for Different Goods
The Tribunal addressed whether the small scale exemption is deniable to a manufacturer using another person's brand name when the goods are different from those of the brand name owner. The Tribunal considered the case of M/s. Sputnik Switch Gears Pvt. Ltd., where the brand name 'Sputnik' was used for Miniature Circuit Breakers (MCBs). The Tribunal found that the brand name 'Sputnik' was registered in favor of the respondents for MCBs, and thus, they were entitled to the SSI exemption. The Tribunal also examined cases involving auto parts branded 'SI' by M/s. Swadesh Enterprises and others, where the Commissioner (Appeals) allowed the exemption as the brand name owner used it on different goods. The Tribunal concluded that the mischief of para 4 of the SSI exemption notification applies only if the brand name owner uses the brand name on identical goods. The Tribunal's decision was supported by the Supreme Court's judgment in Paliwal Electricals and the CBEC's circular, which clarified that the bar of para 4 applies only to identical goods.

Conclusion:
The Tribunal held that the benefit of SSI exemption is available to a manufacturer using a brand name similar to another person's brand name if the goods are different. The Tribunal dismissed Appeal No. 2272/2001 and sent the records of other appeals to the regular Bench for final disposal based on the decision on the second issue.