2001 (5) TMI 113 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for SSI exemption under Notification 175/86 and 1/93 for 'Bisleri Club Soda' and 'Citra'.
2. Ownership and effective control of the brand names 'Bisleri' and 'Bisleri Club Soda'.
3. Alleged undervaluation and mis-statement by BBPL, AMPL, and PEL.
4. Application of the concept of "piercing the corporate veil".

Detailed Analysis:

1. Eligibility for SSI Exemption for 'Bisleri Club Soda':
- Issue: The primary issue was whether the brand name 'Bisleri Club Soda' was eligible for the SSI exemption under Notification 175/86.
- Findings:
- Investigations revealed that 'Bisleri' and 'Bisleri Club Soda' are distinct brand names, with 'Bisleri Club Soda' owned by Parle Exports Ltd. (PEL), a non-SSI unit.
- The Commissioner erroneously concluded that 'Bisleri' and 'Bisleri Club Soda' were the same due to a disclaimer on 'Club Soda'.
- The Tribunal held that the brand name 'Bisleri Club Soda' was effectively controlled by PEL, making it ineligible for SSI exemption.

2. Ownership and Effective Control of Brand Names:
- Issue: Determining the actual ownership and control of the brand names 'Bisleri' and 'Bisleri Club Soda'.
- Findings:
- The brand name 'Bisleri' was assigned to Acqua Minerale (AMPL) by PEL, but 'Bisleri Club Soda' was not assigned until July 1993.
- Even post-assignment, PEL retained effective control over the brand, managing marketing and production, thus making the SSI exemption inapplicable.
- The Tribunal emphasized the concept of "who is calling the shots," concluding that PEL was the effective owner of 'Bisleri Club Soda'.

3. Alleged Undervaluation and Mis-statement:
- Issue: Allegations of fraudulent availing of SSI exemption by BBPL in conspiracy with AMPL and PEL.
- Findings:
- Investigations indicated that BBPL availed SSI exemption by mis-stating facts and suppressing information, leading to a demand of Rs. 39,51,028/- for duty evasion.
- The Tribunal found that PEL and its associates fragmented production to stay within SSI exemption limits, which was deemed a deliberate act to evade duty.

4. Application of the Concept of "Piercing the Corporate Veil":
- Issue: Whether the corporate veil should be pierced to reveal the true nature of control and ownership.
- Findings:
- The Tribunal found no legal basis to pierce the corporate veil under the Trade and Merchandise Marks Act, 1958.
- It was held that the assignments of brand names, once approved by statutory authorities, could not be questioned in excise proceedings.

Conclusion:
- 'Citra': The Tribunal referenced previous decisions, confirming that the brand name 'Citra' owned by Limca Flavours and Fragrances Ltd. (LFFL), an SSI unit, was eligible for SSI exemption.
- 'Bisleri Club Soda': The Tribunal concluded that 'Bisleri Club Soda' was effectively controlled by PEL, thus ineligible for SSI exemption.
- Overall Decision: The Tribunal dismissed the Revenue's appeals, upholding the eligibility for SSI exemption for 'Citra' and 'Bisleri Club Soda' for the respondents, as they were considered Small Scale Units.

This comprehensive analysis ensures that all relevant legal terminologies and significant phrases from the original judgment are preserved, providing a thorough understanding of the case.