2005 (2) TMI 308 - AT - Central Excise

Summary

Issues:
Denial of SSI Notification benefit based on the use of the brand name "Mr. Butler" by the appellants, duty evasion under Section 11A of the Central Excise Act, 1944, imposition of penalty under Section 11AC, demand for interest under Section 11AB, challenge of the impugned order before the Tribunal.

Analysis:
The Commissioner denied the SSI Notification benefit to the appellants due to their use of the brand name "Mr. Butler" for Soda Making Machines, which was owned by another unit, M/s. Protech Appliances Ltd. (PAL). A demand of Rs. 31,51,829/- was confirmed under Section 11A, with an equal penalty under Section 11AC and interest under Section 11AB. The appellants contested this decision before the Tribunal on various grounds.

The appellants argued that they had used the brand name "Mr. Butler" since 1985, even before M/s. PAL, and that M/s. PAL had conceded to the appellants' better right over the brand name in affidavits submitted to the Assistant Commissioner at Coimbatore. The jurisdictional AC had dropped proceedings against the appellants in 1995, and M/s. PAL later withdrew their application for trademark registration. The appellants contended that there was no justification for the Commissioner to proceed against them, especially after the matter had been settled by M/s. PAL's concession.

The Tribunal noted that there was no evidence to establish M/s. PAL as the exclusive owner of the brand name "Mr. Butler." The AC at Coimbatore had dropped proceedings against the appellants in 1995, a decision unchallenged by Revenue. Despite M/s. PAL's success in litigation, the Tribunal found that the ownership of the brand name was unclear, as both units had applied for it. Without clear ownership, the Tribunal could not determine brand name misuse. The Tribunal concluded that any misdeclaration could be attributed to M/s. PAL, who continued to use the brand name despite conceding to the appellants. The Tribunal found no grounds for invoking the extended period and set aside the Commissioner's order, ruling in favor of the appellants.