2014 (1) TMI 116 - AT - Central Excise

Denial of Benefit of SSI Notification No.1/93 Brand name not belonging to appellant Held that - C.B.E. & C. Circular No. 88/88-CX.6, dated 30-12-1988, while dealing with the eligibility of small scale exemption Notification No. 175/86 clarified that a trade mark need not necessarily be in respect of goods unless the registration has been so acquired - It is, quite possible and permissible to have the same trade mark/brand name for different classes of goods owned by different persons - a company being legal registered owner of trade mark Hotline in respect of Gas Stoves, the same brand name can be used by another company for a different commodity like television - use of brand name for different goods is permissible under the law Relying upon CCE, Ahmedabad v. Vikshara Trading & Invest P. Ltd. 2003 (8) TMI 49 - SUPREME COURT OF INDIA - While giving the full description of the goods manufactured by the appellant the words SKN are written at the top - there could be a bona fide belief on their part as regards the use of brand name SKN in respect of the goods manufactured by them, which were not being manufactured by the brand name owner M/s. SKN Associates order set aside and the matter remanded back to the original adjudicatory authority Decided in favour of aseesee.

Summary

Issues:
1. Denial of small scale Notification benefit due to the use of brand name.
2. Entitlement to use brand name for different goods.
3. Invocation of extended period of limitation for raising demand.
4. Interpretation of trade mark ownership and permissible use for different goods.
5. Imposition of penalty in absence of mala fide intention.

Issue 1: Denial of small scale Notification benefit due to the use of brand name.
The appellant was engaged in manufacturing various goods under the brand name 'SKN,' which was found to belong to another entity, M/s. SKN Associates. The officers denied the benefit of small scale notification to the appellant based on this finding.

Issue 2: Entitlement to use brand name for different goods.
The appellant believed they could use the brand name 'SKN' for their goods, as it was registered by M/s. SKN Associates for different products not manufactured by the appellant. They argued that previous Tribunal decisions supported the use of the same brand name for different goods, which was not against the small scale exemption notification.

Issue 3: Invocation of extended period of limitation for raising demand.
The show cause notice was raised invoking the extended period of limitation. The appellant contended that they believed in good faith they could use the brand name owned by another entity for different goods, as supported by previous Tribunal decisions.

Issue 4: Interpretation of trade mark ownership and permissible use for different goods.
During the relevant period, it was clarified that a trade mark need not necessarily be in respect of goods unless specifically registered as such. The Tribunal and the Supreme Court upheld decisions allowing the use of the same brand name for different goods, as long as there was no mala fide intention.

Issue 5: Imposition of penalty in absence of mala fide intention.
The Tribunal found no mala fide intention on the part of the appellant regarding the use of the brand name 'SKN' for their goods. Therefore, the penalty imposed was set aside, and the matter was remanded for quantification of the demand within the period of limitation.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned order and remanding the matter for further assessment within the period of limitation. The penalty was also revoked due to the absence of mala fide intention.