2015 (3) TMI 170 - AT - Central Excise

SSI exemption under Notification No. 8/2003-CE (NT) dated 1.3.2003 - Use of other person's brand name - Held that - Brand name 'Elac' was registered in the name of M/s. K.N. Industries. The applicant filed an application to the Trademark Authority for registration of the brand name 'Elac Excel'. The learned counsel submitted that the brand name 'Elac' and 'Elac Excel' referred are different and therefore demand of duty is not justifiable. He relied upon the decision of the Hon'ble Madras High Court. The adjudicating authority observed that the brand name 'Elac Excel' is akin to 'Elac' belonging to M/s. K.N. Industries and therefore they are not eligible to avail SSI exemption. Dispute relates to brand name 'Elac Excel' which is similar to 'Elac' which will be decided at the time of hearing the appeals at length. However, there is some force in the submission of the learned counsel for the applicant that there is a difference between the two brand names 'Elac' and 'Elac Excel'. Hence, the applicant failed to make out a strong prima facie case for waiver of predeposit of entire dues. At this stage, the learned counsel submits that the applicants are eligible for CENVAT credit of ₹ 30,93,454/- and undertakes not to utilize the CENVAT credit till the disposal of the appeals. In view of that, we direct the applicant to file an undertaking within one month from the date of the receipt of the order to the jurisdictional Deputy Commissioner of Central Excise that the CENVAT credit amount of ₹ 30,93,454/- will not be utilized till the disposal of the appeals. Upon such undertaking, predeposit of the balance dues stands waived and recovery thereof stayed during the pendency of the appeals. - Stay granted.

Summary

Issues:
1. Eligibility for SSI exemption based on the use of a brand name.
2. Interpretation of brand name similarity and its impact on SSI exemption.
3. Consideration of CENVAT credit eligibility and its utilization during appeal proceedings.

Analysis:
The case involved applicants engaged in manufacturing water heaters under the brand name 'Elac Excel' seeking SSI exemption under Notification No. 8/2003-CE. The adjudicating authority denied the exemption, citing the use of a brand name belonging to another entity, M/s. K.N. Industries. The authority demanded duty payment along with penalties. The applicants argued that 'Elac' and 'Elac Excel' were distinct, emphasizing a difference in brand names. Reference was made to a Madras High Court decision supporting this claim. However, the authority deemed the brand names similar, drawing parallels to a Supreme Court case involving 'Meghraj' brand names. The Tribunal acknowledged the difference between 'Elac' and 'Elac Excel' but found the case required a detailed examination during the appeal. The Tribunal allowed the applicants to utilize CENVAT credit amounting to Rs. 30,93,454 but mandated an undertaking to refrain from using it until the appeal's conclusion. Consequently, the predeposit of the remaining dues was waived, and recovery stayed pending appeal proceedings.

In summary, the Tribunal's decision hinged on the interpretation of brand name similarity and its impact on SSI exemption eligibility. While acknowledging differences between 'Elac' and 'Elac Excel,' the Tribunal opted for a detailed examination during the appeal process. The allowance of CENVAT credit utilization, subject to an undertaking, was a significant aspect of the judgment, ensuring financial flexibility for the applicants during the appeal proceedings.