2009 (5) TMI 265 - AT - Central Excise

Denial of SSI exemption (under Notification No. 1/93-C.E., dated 28-2-1993) on ground that assessee is using brand name of another - case of the Revenue is that the appellants had used the brand name K belonging VKPL on the excisable goods manufactured and cleared by them - has not adduced any evidence to substantiate that the logo K belonged to others - Moreover, the appellants are not shown to have used the logo K written in the peculiar design and style, embossed on the pumps manufactured by VKPL, had been embossed on pumps manufactured by the appellants. - This alphabet K cannot be claimed to be owned by any particular person. Therefore, the allegation that the excisable goods manufactured and cleared by the appellants were not eligible for the SSI exemption for the reason that they bore the brand name of another person is without basis. - Appellants had been denied the SSI exemption by the lower authorities without legal justification. In the result, the impugned order is set aside appeal is allowed

Summary

Issues:
1. Allegations of unauthorized use of a brand name on manufactured goods.
2. Confiscation of goods and imposition of penalties under Central Excise Rules.
3. Interpretation of brand name ownership and its impact on availing exemptions.

Analysis:
1. The case involved allegations of unauthorized use of a brand name 'K' on manufactured goods by the appellants, leading to the denial of small-scale exemption benefits. The original authority confirmed duty demand, confiscation of goods, and imposed penalties under Central Excise Rules based on the alleged unauthorized use of the brand name. However, the appellants contested these findings, arguing that the impugned order lacked a proper application of mind and failed to address their contentions adequately.

2. The appellants further challenged the sustainability of the confiscation of goods, contending that the seized items did not bear the letter 'K' as claimed by the authorities. They argued that the confiscation was not justified as the goods were seized as material evidence under Central Excise law and not for clandestine removal purposes. Additionally, they highlighted discrepancies in the allegations made in the show-cause notice, questioning the basis for the confiscation.

3. The Tribunal examined the ownership of the brand name 'K' and its implications on availing exemptions. It was noted that the Revenue failed to provide evidence establishing that the logo 'K' belonged to the entity VKPL. The Tribunal emphasized that unless a brand name was owned by a specific person, its use should not deprive an entity of small-scale exemption benefits. Referring to relevant Circulars and legal interpretations, the Tribunal concluded that the appellants did not infringe on the brand name of another person by using the alphabet 'K' on their manufactured goods. Consequently, the denial of the small-scale exemption to the appellants was deemed unjustified, leading to the setting aside of the impugned order and allowing the appeal by M/s. Metriplex Pumps Pvt. Ltd.

This comprehensive analysis highlights the legal intricacies surrounding the unauthorized use of brand names, the implications on availing exemptions, and the importance of establishing ownership in such cases.