2004 (2) TMI 268 - AT - Central Excise

SSI Exemption - Brand name - Word word PETHE used on the metal labels is a brand name or trade name - confiscation of the seized goods - applicability of extended period for show cause notice - HELD THAT - We agree with the submission in view of the Supreme Court decision in the case of Astra Pharmaceuticals Ltd. 1994 (12) TMI 77 - SUPREME COURT . The word PETHE is only a family name and not registered as brand or trade name of the appellants or anybody else and Department has not proved that the word PETHE belongs to any particular person. We find support in the CBEC Circular 52/52/94-CX, 1-9-1994 that the brand name is not owned by any particular person. The use thereof will not deprive a unit of the benefit of SSI. Though we hold that the word PETHE cannot be considered as a brand name or trade name but even if the same is considered as brand name or trade name and since it is not owned by any particular person, relying on CBEC circular, the appellants could be entitled for SSI exemption. We also find support in the Tribunal's judgment reported in 2001 (8) TMI 426 - CEGAT, NEW DELHI Unjha Ayurvedic Pharmacy v. CCE, Jaipur. We have perused the classification list and the model nos. given and detailed description alongwith the classification list. Therefore, we find that relying upon the judgment in the case of CCE, Chandigarh v. Fine Inds 2002 (10) TMI 114 - CEGAT, COURT NO. II, NEW DELHI , we hold that the appellants are entitled to SSI exemption, as the goods manufactured by both the appellants and other unit are not identical. We do not go into the issue of limitation urged by the ld. Counsel as we have held that the appellants are entitled to SSI exemption on merits. Therefore, in the result the impugned order is set aside and the appeal is allowed with consequential relief.

Summary

Issues involved: Interpretation of brand name/trade name for SSI exemption, differentiation of goods manufactured by related units, applicability of extended period for show cause notice.

Interpretation of brand name/trade name for SSI exemption:
The appellants were engaged in manufacturing electric motors, brakes, clutches, and parts under specific tariff headings. They were accused of using the brand name "PETHE" on their goods to avail SSI exemption. The Commissioner held that the word "PETHE" constituted a brand name or trade name, connecting the manufacturer to the goods, and attracting denial of SSI exemption under Notification No. 1/93. However, the appellants argued that "PETHE" was their family name and not a brand/trade name, citing a Supreme Court decision and CBEC Circular supporting their claim.

Differentiation of goods manufactured by related units:
The appellants' factory and another unit, M/s. PETHE Engg. Pvt. Ltd., were manufacturing similar products but with different models, capacities, and end uses. The appellants contended that since the goods were not identical to those of the other unit, they should not be denied SSI exemption even if "PETHE" was considered a brand/trade name. They referenced a Tribunal judgment to support their argument.

Applicability of extended period for show cause notice:
The appellants claimed that the show cause notice issued beyond six months was time-barred based on Supreme Court cases. They argued that there was no deliberate suppression of facts to evade duty payment, and mere negligence did not warrant the extended period. The Department, however, maintained that the demands and penalties were correctly confirmed by the Commissioner.

In the judgment, the Tribunal agreed with the appellants, ruling that "PETHE" was a family name and not a brand/trade name. They also found that the goods manufactured by the appellants and the other unit were not identical, supporting the appellants' entitlement to SSI exemption. The issue of limitation was not addressed as the appellants were granted relief on merit, leading to the setting aside of the impugned order and allowing the appeal.