2006 (6) TMI 12 - AT - Central Excise

Central Excise - SSI Exemption - Brand name - The goods bearing brand name indicated connection between branded goods and respondents collaborators - Not eligible for SSI benefit

Summary

Issues:
1. Denial of SSI benefit to clearances with a specific brand name.
2. Interpretation of the definition of "brand name" as per Notification No. 1/93-CE.
3. Application of legal precedents regarding brand names in similar cases.

Issue 1: Denial of SSI benefit to clearances with a specific brand name
The case involved the department denying SSI benefit to clearances made by the respondents after affixing the brand name "AIDEES NEWALL" due to the brand "NEWALL" belonging to the respondents' collaborators. The department relied on para-4 of SSI Notification No. 1/93-CE, which restricted SSI benefit for goods cleared under another person's brand name. The original authority upheld the denial and imposed a penalty, but the appellate Commissioner ruled in favor of the assessee, leading to the department's appeal.

Issue 2: Interpretation of the definition of "brand name" as per Notification No. 1/93-CE
The Appellate Tribunal examined whether the brand name "AIDEES NEWALL" indicated a connection in the course of trade between the goods and the owner of the brand name "NEWALL," as defined in Explanation IX of the Notification. Citing legal precedents, including the Supreme Court judgments in similar cases, the Tribunal concluded that the brand name in question did establish a trade connection, thereby disqualifying the clearances from SSI benefit under para-4 of the Notification.

Issue 3: Application of legal precedents regarding brand names in similar cases
The Tribunal referred to the Supreme Court judgments in CCE, Trichy Vs. Rukmani Pakkwell Traders and CCE, Raipur vs. Hira Cement to support its decision. These cases highlighted that even minor changes to a brand name did not negate the connection in the course of trade between the goods and the brand owner. Applying this reasoning to the present case, where the respondents combined their own word with a pre-existing brand name, the Tribunal found that the clearances were not eligible for SSI benefit. Consequently, the Tribunal set aside the impugned order, upheld the duty demand, and deemed the penalty imposed by the original authority as reasonable.

In conclusion, the Appellate Tribunal, Chennai, allowed the department's appeal, ruling against granting SSI benefit to clearances made under the brand name "AIDEES NEWALL" due to its connection with the brand name "NEWALL" owned by the respondents' collaborators. The decision was based on a thorough analysis of the legal definition of "brand name," relevant precedents, and the specific circumstances of the case.