2000 (4) TMI 110 - AT - Central Excise

Summary

Issues:
1. Eligibility for S.S.I. exemption under notification No. 175/86 due to foreign brand names on goods.
2. Denial of S.S.I. benefit based on foreign brand names "SONY" and "NATIONAL" affixed to goods.
3. Interpretation of para 7 of Notification No. 175/86-C.E.
4. Use of brand names "Vikram Sony" and "Vikram National" by appellants.

Analysis:

1. The case involved M/s. Vikram International manufacturing Radio Cassette Recorders and Car Cassette Players, seeking S.S.I. exemption under notification No. 175/86. The issue arose when the goods were found to carry foreign brand names "Vikram National" and "Vikram Sony," leading to a demand of Rs. 24,21,270.83. The original authority and Commissioner (Appeals) upheld the denial of the benefit based on these brand names.

2. The Commissioner (Appeals) noted that the use of "National" or "Sony" along with "Vikram" violated para 4 of notification No. 1/93 and the Copyright Act. Despite the delay in the case, the denial of S.S.I. benefit was upheld. However, the appellants argued that there was no evidence of "Vikram Sony" or "Vikram National" being foreign brand names, and they were unaware of any conditions imposed by Bombay Customs regarding foreign markings on imported goods.

3. The interpretation of para 7 of Notification No. 175/86-C.E. was crucial, stating that the exemption does not apply if a manufacturer affixes specified goods with a brand name of another person not eligible for the exemption. The department contended that "SONY" and "NATIONAL" were foreign brand names, rendering the appellants ineligible for the exemption.

4. The Larger Bench of CEGAT had previously held that goods affixed with a foreign brand name are not entitled to S.S.I. exemption. However, in this case, the products were marked as "Vikram Sony" and "Vikram National," not directly linking them to foreign companies. The Tribunal cited precedents where the use of foreign brand names led to denial of exemption, contrasting with the present case where the brand names did not establish a direct connection with foreign companies.

In conclusion, the Tribunal set aside the lower appellate authority's order, allowing the appeal and any consequent benefits for M/s. Vikram International based on the lack of evidence establishing a direct relationship between the brand names used and foreign companies, thus entitling them to the S.S.I. exemption.