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2009 (9) TMI 401 - AT - Central ExciseSSI Exemption- brand name- Notification No. 1/93- that M/s. Karan Enterprises is a Proprietorship concern of Mrs. Rajini Chopra w/o Shri Vinod Chopra. Shri Vinod Chopra is one of the Partners of another firm M/s. Metal Fold Fasteners. Both the firms were apparently engaged in the manufacture of Bolts and Screw Manufacturing Machines. On the date of visit by the Officers on 17-12-1996 to the premises of M/s. Metal Fold Fasteners they found certain records relating to M/s. Karan Enterprises. Shri Vinod Chopra admitted that he was looking after the work of M/s. Karan Enterprises and also admitted that the goods were being cleared with the brand name Metal Fold . Show cause notice was issued alleging that the brand name Metal Fold belongs to M/s. Metal Fold Fasteners and that M/s. Karan Enterprises have cleared the machinery with the brand name belonging to third party and therefore not eligible for the exemption under Notification No. 1/93. The original authority confirmed the demand of duty of Rs.3, 50, 369/- along with interest and imposed equal amount as penalty under Section 11AC read with Rule 173Q. He also imposed a penalty of Rs.10, 000/- on M/s. Metal Fold Fasteners under Rule 209A of the Central Excise Rules 1944. Held that- It is the claim of M/s. Metal Fold Fasteners that the brand name used by them was Metal Fold Machinery in red colour and the claim of M/s. Karan Enterprises is that they used the brand name Metal Fold in blue colour. Under these circumstances the decision of the Commissioner (Appeals) allowing the appeal of M/s. Karan Enterprises cannot be found fault with. In view of the above the appeal by the Department is rejected.
Issues:
1. Ownership of brand name 'Metal Fold' by M/s. Karan Enterprises. 2. Allegation of brand name infringement by the Department. 3. Appeal against the order of the Commissioner (Appeals). Detailed Analysis: 1. The case involved a dispute regarding the ownership of the brand name 'Metal Fold' used by M/s. Karan Enterprises. The Department alleged that M/s. Karan Enterprises cleared machinery with a brand name belonging to a third party, M/s. Metal Fold Fasteners, thus making them ineligible for an exemption under Notification No. 1/93. The original authority imposed a duty demand, interest, and penalties on M/s. Karan Enterprises. On appeal, the Commissioner (Appeals) set aside the duty demand and penalties imposed on M/s. Karan Enterprises, leading to the Department's appeal against this decision. 2. The Department contended that Shri Vinod Chopra, associated with both M/s. Karan Enterprises and M/s. Metal Fold Fasteners, admitted to clearing machinery from M/s. Karan Enterprises with the brand name 'Metal Fold.' The Department argued that the Commissioner (Appeals) erred in accepting the claim made by Shri P.K. Chopra, an authorized signatory of M/s. Karan Enterprises, regarding the ownership of the brand name. The Department sought to set aside the Commissioner's decision and reinstate the original authority's order. 3. The Tribunal carefully evaluated the submissions and evidence presented. It was highlighted that M/s. Metal Fold Fasteners claimed to use the brand name 'Metal Fold Machinery' in red color, while M/s. Karan Enterprises asserted the use of 'Metal Fold' in blue color. The Tribunal noted that Shri Vinod Chopra, although related to M/s. Karan Enterprises, was not proven to be an authorized representative. The confessional statement by Shri P.K. Chopra did not conclusively establish that the brand name 'Metal Fold' belonged to M/s. Metal Fold Fasteners. Additionally, the admission by purchasers of receiving machinery with the 'Metal Fold' brand from M/s. Karan Enterprises did not contradict M/s. Karan Enterprises' claim of ownership. The Tribunal upheld the Commissioner (Appeals) decision, ruling in favor of M/s. Karan Enterprises due to the lack of substantial evidence proving brand name infringement. In conclusion, the appeal by the Department was rejected by the Tribunal based on the lack of conclusive evidence establishing brand name infringement by M/s. Karan Enterprises.
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