1994 (5) TMI 121 - AT - Central Excise

Summary

Issues:
Grant of benefit of exemption under Notification No. 175/86-C.E., assessment and valuation, ownership of brand name 'GBC', application of para 7 of the notification, interpretation of trade name, validity of para 7, conflicting judgments of Calcutta High Court and Karnataka High Court, consideration of Tribunal's previous judgment.

Analysis:
The judgment involves multiple appeals challenging orders related to the grant of exemption under Notification No. 175/86-C.E. The common question of law and facts in these appeals is the applicability of the exemption. In Appeal No. E/3986 & 3987/90-B1, the appellant contested the denial of exemption under the notification. Appeal No. E/5593/92-B1 concerned the calculation of differential duty, while Appeal No. E/1395/93-B1 challenged the dismissal of appeals by the Collector (Appeals) due to non-dispute of the demand amount.

The core issue in these appeals was the use of the brand name 'GBC' by the appellants, which was found not to be their own but of General Binding Corporation, USA. The notification excludes goods affixed with a brand name of another ineligible entity from exemption. The definition of 'Brand Name' was crucial, referring to any name or mark indicating a trade connection. The agreement between the appellants and G.B.C. USA was analyzed to determine the ownership and usage rights over the brand name.

The arguments presented by the appellants emphasized the exclusive rights granted by G.B.C. USA and the lack of payment for using the brand name. They contended that the connection between the goods and the foreign company did not disqualify them from the exemption. Reference was made to conflicting judgments of Calcutta High Court and Karnataka High Court regarding the validity and application of para 7 of the notification.

The Revenue argued that the brand name 'GBC' indicated a trade connection with the foreign company, disqualifying the goods from exemption. The Tribunal examined the agreement and concluded that the foreign company owned the brand name and benefited from its use by the appellants. The Tribunal referred to a previous judgment where the use of a brand name disentitled exemption, supporting the denial of benefit in this case.

Ultimately, the Tribunal rejected the appeals based on the precedent set by its previous judgment and the reasoning of the Karnataka High Court. The Tribunal upheld the denial of exemption due to the usage of the brand name 'GBC' owned by the foreign company, aligning with the interpretation of para 7 of the notification and relevant legal principles.