1991 (10) TMI 168 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 175/86-C.E.
2. Definition and interpretation of "brand name" or "trade name."
3. Impact of the brand name owner's manufacturing or trading status on exemption eligibility.

Issue-Wise Detailed Analysis:

1. Eligibility for Exemption under Notification No. 175/86-C.E.:
The appellants, engaged in the manufacture of grinders, polishers, and presses, claimed exemption under Notification No. 175/86-C.E. for products branded with "CINNI," a name owned by M/s. Raj Kumar Sah & Sons, who were not manufacturers. The Assistant Collector initially granted the exemption, but the Collector of Central Excise (Appeals) denied it, arguing that the brand name owner was ineligible for the exemption as they were not manufacturers. The appellants contended that the term "another person" in para 7 of the notification does not exclusively refer to manufacturers, and the brand name owner could be a trader or non-manufacturer.

2. Definition and Interpretation of "Brand Name" or "Trade Name":
The appellants argued that "CINNI" should not be considered a "brand name" or "trade name" under Notification No. 175/86-C.E., as it did not indicate a connection in the course of trade between the goods and the appellants. They cited Explanation VIII of the notification, which defines a brand name as a name or mark used to indicate a connection in the course of trade between the goods and the person using the name or mark. The Tribunal found that the appellants' use of "CINNI" indicated a connection between their products and themselves as users of the brand name, thus treating "CINNI" as a brand name under the notification.

3. Impact of the Brand Name Owner's Manufacturing or Trading Status on Exemption Eligibility:
The appellants claimed that M/s. Raj Kumar Sah & Sons, as non-manufacturers, were eligible for exemption under Notification No. 175/86-C.E. The respondents argued that the brand name owner should be treated as a trader, and the use of the brand name "CINNI" by the appellants disqualified them from the exemption. The Tribunal referred to its decision in Thio Pharma v. Collector of Central Excise, which held that a person who is not a manufacturer cannot avail of the exemption. Since M/s. Raj Kumar Sah & Sons were not engaged in manufacturing, they were ineligible for the exemption, and consequently, the appellants could not claim the exemption under para 7 of the notification.

Conclusion:
The Tribunal confirmed the order of the Collector (Appeals) and rejected the appeal. The key points were:
- The use of "CINNI" by the appellants indicated a connection in the course of trade, making it a brand name under Notification No. 175/86-C.E.
- M/s. Raj Kumar Sah & Sons, as non-manufacturers, were ineligible for the exemption, and thus the appellants could not claim the exemption under para 7 of the notification.
- The eligibility of a manufacturer using another person's brand name for exemption must be decided based on para 7 and Explanation VIII of the notification, not paras 3 and 4 or Explanation IV.