1997 (7) TMI 420 - AT - Central Excise

Summary

Issues:
1. Denial of benefit of Notification 1/93 based on the use of a brand name.
2. Interpretation of whether the brand name used falls under M/s. Katari Ceramic Industries.
3. Examination of statements from managing partners regarding the brand name usage.
4. Confirmation of duty demand based on the brand name usage.
5. Reduction of penalty imposed in the case.

Analysis:
The appeal in this case challenges the denial of benefits under Notification 1/93 due to the alleged use of the brand name of M/s. Katari Ceramic Industries by the appellant. The appellant's consultant argued that the similarity in names, Katari Refractories, and Katari Ceramic Industries does not automatically imply the use of the latter's brand name. Referring to a Board's letter, it was emphasized that the benefit of the small-scale exemption scheme should not be deprived if a brand name is not owned by a specific person. This argument was based on the contention that the brand name "Katari" was not exclusively owned by M/s. Katari Ceramic Industries.

On the contrary, the JDR for the department contended that the managing partner of the appellant's firm admitted to using the brand name of M/s. Katari Ceramic Industries. This assertion was supported by a statement from the managing partner of M/s. Katari Ceramic Industries, confirming that the appellant utilized their brand name. The department argued that the goods of the appellant fell within the scope of the relevant notification's Explanation VIII during the period in question, justifying the denial of the notification's benefit.

Upon evaluating the submissions, the Tribunal found that the appellant indeed used the brand name of M/s. Katari Ceramic Industries. Statements from the managing partners of both entities confirmed this fact. The managing partner of the appellant admitted to using the brand name "Katari" for manufacturing and marketing ceramic pickle jars, a name associated with M/s. Katari Ceramic Industries. Similarly, the managing partner of M/s. Katari Ceramic Industries acknowledged that the brand name was adopted by the appellant for marketing their goods. Consequently, the Tribunal upheld the denial of the benefit of Notification 1/93, citing the appellant's use of the brand name.

Regarding the penalty imposed, the Tribunal reduced it to Rs. 7,500 considering the circumstances of the case. Despite this modification, the appeal was dismissed, affirming the duty demand based on the appellant's use of the brand name of M/s. Katari Ceramic Industries. The Tribunal emphasized the clear nexus between the marketing of the appellant's goods and the brand name, as evidenced by the statements provided by the managing partners, leading to the rejection of the appellant's arguments.