2012 (11) TMI 635 - AT - Central Excise

Waiver of pre-deposit - Denial of SSI exemption on the ground that the goods are being manufactured under the brand name of other - contention of applicant is that the brand name is registered in the name of M/s. Pandit D.P. Sharma & Sons - In M/s. Sharma Chemicals and M/s. Himtaj Ayurved Pvt. Ltd. one son and grandson of Pandit D.P. Sharma are the directors therefore his son and grandson is legally entitled to use the brand name after the death of Pandit D.P. Sharma Held that - Provisions of SSI notifications provide that the benefit of notification is not available in case the goods are manufactured with the unregistered or registered brand name of others. In the present case M/s. Himtaj Ayurved Pvt. Ltd. is manufacturing goods with the brand name of others - applicants had not produced any legal documents to show that the applicants got right to succeed in respect of the trade name owned by the companies run by the father and grandfather of the applicant appellant directed to deposit

Summary

Issues:
Delay in filing appeals, waiver of pre-deposit of dues, small scale exemption notification benefit denial based on brand name ownership.

Delay in filing appeals:
The applicant filed applications to condone a nine-day delay in filing the appeals, which was allowed by the Tribunal due to the reasons explained by the applicant.

Waiver of pre-deposit of dues:
The applicant sought waiver of pre-deposit of total duty, interest, and penalties amounting to Rs.48.07 lakhs. The Revenue denied the benefit of small scale exemption notification, claiming that the goods were manufactured under brand names owned by different entities. The applicant argued that as the brand name was registered under related entities, they were entitled to use it. However, the Tribunal found that the benefit of the notification is not available when goods are manufactured with the registered brand name of others. As the brand names were registered under different entities, the waiver was not granted entirely.

Small scale exemption notification benefit denial based on brand name ownership:
The Tribunal noted that the benefit of the small scale exemption notification was being denied to the applicant, a Private Limited Company, as the brand names in question were registered under different entities. The Tribunal emphasized that the benefit is not available if goods are manufactured with the brand name of others. The applicant failed to provide legal documents proving the right to succeed in the trade name owned by the related entities. Considering the financial hardship claimed by the applicant, a deposit of Rs. 15 lakhs was directed within eight weeks, with the waiver of pre-deposit granted upon compliance, and recovery stayed during the appeal's pendency. Compliance was required to be reported by a specified date.

This judgment highlights the importance of ownership and registration of brand names in determining eligibility for benefits under small scale exemption notifications in excise matters. The Tribunal's decision underscores the need for proper documentation to establish rights over brand names and the consideration of financial hardship in determining the deposit amount and waiver of pre-deposit.