2006 (6) TMI 19 - AT - Central Excise

Central Excise - SSI Exemption - Brand name - Assessee added its own word in the pre-existing brand name of collaborator - New brand name indicate connection in course of trade with brand name of the collaborator - Not eligible for SSI benefit

Summary

Issues:
1. Whether the brand name "AIDEES NEWALL" used by the respondents indicated a connection in the course of trade between the goods and the owner of the brand name "NEWALL" as per the provisions of Notification No. 1/93-C.E.
2. Whether the respondents were eligible for the Small Scale Industries (SSI) benefit for the clearances made during the disputed period.
3. Whether the penalty imposed on the party by the original authority was reasonable.

Analysis:
1. The case involved the respondents engaged in manufacturing "Linear Measuring Instruments" under Heading 84.66 of the CETA Schedule, who used the brand name "AIDEES NEWALL" on their products. The department contended that "NEWALL" was the brand name of the respondents' collaborators, and therefore, clearances under the brand name "AIDEES NEWALL" were not eligible for SSI benefit as per para-4 of SSI Notification No. 1/93-C.E. The original authority confirmed the demand and imposed a penalty, which was challenged by the respondents in appeal.

2. The Tribunal examined whether the brand name "AIDEES NEWALL" indicated a connection in the course of trade with the owner of the brand name "NEWALL" as defined in Explanation IX of the Notification. Referring to the Supreme Court judgments in similar cases, the Tribunal found that the addition of "AIDEES" to the preexisting brand name "NEWALL" still established a connection in the course of trade. Therefore, the clearances under the brand name "AIDEES NEWALL" were not eligible for SSI benefit, and the demand for duty was upheld.

3. The Tribunal considered the penalty imposed by the original authority to be reasonable in the circumstances of the case. It concluded that the impugned order denying SSI benefit to the respondents and demanding duty on the clearances made under the brand name "AIDEES NEWALL" was justified. Consequently, the appeal of the department was allowed, setting aside the earlier order in favor of the respondents.