2000 (6) TMI 615 - AT - Central Excise

Summary

Issues:
1. Denial of exemption under Notification No. 1/93 for manufacturing goods under the brand name "Decon."
2. Validity of the assignment of the Trade Mark "Decon" from one entity to another.
3. Imposition of duty, penalty, and stock shortage charges on the appellant.

Issue 1: Denial of Exemption under Notification No. 1/93
The case involved M/s. Strebor Designs, a partnership firm manufacturing lighting fixtures and accessories under the brand name "Decon." A show cause notice was issued alleging the unauthorized use of the brand name "Decon," leading to a demand of Rs. 6,19,464. The appellant contended that they owned the brand name "Decon" following a legitimate assignment. The Commissioner, however, confirmed the demand, imposed additional duty, and penalties. The main question was whether M/s. Strebor Designs were the rightful owners of the Trade Mark "Decon" to qualify for the exemption under Notification No. 1/93.

Issue 2: Validity of Trade Mark Assignment
The Tribunal examined the history of the Trade Mark "Decon," originally registered by Late Shri Dharam Pal Singh and later assigned to M/s. Strebor Designs by Livinder Singh. The Commissioner alleged the assignment was a sham arrangement, but the Tribunal disagreed. It was clarified that the assignment was not merely for using the brand name but a transfer of proprietary rights, making M/s. Strebor Designs the legitimate owners of the Trade Mark "Decon." Legal precedents were cited to support the assignee's right to benefit from Notification 1/93, emphasizing the ownership of the Trade Mark by the manufacturing entity.

Issue 3: Imposition of Duty, Penalty, and Stock Charges
The Commissioner's decision to impose duty, penalties, and stock shortage charges was overturned by the Tribunal due to the erroneous denial of the appellant's right to the Notification 1/93 benefit. The duty demand, penalties, and stock charges were deemed unjustified as M/s. Strebor Designs rightfully owned the Trade Mark "Decon." Consequently, the duty demand of Rs. 6,19,464, penalties of Rs. 1,50,000 and Rs. 30,000, and stock shortage charges of Rs. 68,634 were vacated. The matter of stock shortage was to be recalculated, and the appellant was directed to be refunded the deposited amount in compliance with the quashed order.

In conclusion, the Tribunal ruled in favor of M/s. Strebor Designs, affirming their ownership of the Trade Mark "Decon" and entitlement to the benefits under Notification No. 1/93. The Commissioner's decision was overturned, and the appellant's liability for duty and penalties was revoked, except for the stock shortage charges, which were to be reassessed.