2015 (8) TMI 388 - AT - Central Excise

Denial of SSI Exemption - Use of third party brand name - Held that - The duty demand for the period from October 1994 to December 1994 is ₹ 3,78,241/- and the remaining amount of ₹ 62,897/- out of the total duty demand of ₹ 4,41,138/- pertains to January-March 1994 period and both the demands are on the basis of denial of SSI exemption in respect of the goods bearing the brand name Blue Dot on the ground that the brand name Blue Dot does not belong to appellant and it belongs to M/s. Standard Sulphonators (P) Ltd. However, it is seen that the show cause notice for October 1994 to December 1994 for demand of the duty of ₹ 3,78,241/- which in the present case which has been adjudicated by the Assistant Commissioner vide Order-in-Original dated 12-5-1998, had also been adjudicated by the Joint Commissioner vide Order-in-Original dated 31-8-2001 along with another show cause notice for an amount of ₹ 5,34,274/- for the period from July to September 1994, the appeal against the Joint Commissioner s order dated 31-8-2001 had been filed to the Commissioner (Appeals) and the Commissioner (Appeals) vide Order-in-Appeal dated 28-6-2004 had set aside the order. By the order dated 28-6-2004 of the Commissioner (Appeals), the appeal filed by the appellant had been allowed and in that order it has been held that it is the appellant who is the owner of the brand name. No appeal has been filed by the Department against this order. Moreover, in terms of the observations of the Commissioner (Appeals) in the impugned order, the appellant is the assignee of the brand name, in question, on transfer from M/s. Standard Sulphonators (P) Ltd. and if this is so, they would be eligible for the SSI exemption. In view of this, the impugned order is not sustainable. The same is set aside - Decided in favour of assessee.

Summary

Issues:
1. Ownership of the brand name "Blue Dot" on detergent goods for SSI exemption eligibility.

Detailed Analysis:

1. Ownership of Brand Name "Blue Dot":
The case involved a dispute regarding the ownership of the brand name "Blue Dot" affixed on detergent goods for availing Small Scale Industry (SSI) exemption. The Department alleged that the brand name belonged to another entity, M/s. Standard Sulphonators (P) Ltd., Kanpur, and sought to deny the SSI exemption to the appellant based on this claim. The Assistant Commissioner confirmed a duty demand against the appellant, which was upheld by the Commissioner (Appeals) in an Order-in-Appeal. The appellant argued that they were the rightful owners of the brand name "Blue Dot" and had assigned it to M/s. Standard Sulphonators (P) Ltd. temporarily, with the assignment later being canceled due to a dispute. They emphasized that no concrete evidence was presented by the Department to prove their claim. The appellant also highlighted a previous order by the Commissioner (Appeals) in 2004, which had ruled in their favor regarding the ownership of the brand name. The Department, represented by the learned DR, contended that the brand name had been transferred to M/s. Standard Sulphonators (P) Ltd. as per a Deed of Assignment dated 1-4-1992, despite a subsequent cancellation agreement on the same date. The DR argued that the cancellation agreement was not notarized and was not produced before the relevant authorities. The crux of the issue was the conflicting claims regarding the ownership of the brand name "Blue Dot," with the appellant asserting their ownership based on the cancellation of the assignment and the Department relying on the initial Deed of Assignment.

2. Conflicting Orders and Legal Interpretation:
The judgment highlighted conflicting orders by the Commissioner (Appeals) regarding the duty demand for the period from October 1994 to December 1994. While one order favored the appellant's eligibility for SSI exemption, the other upheld the duty demand. The Tribunal noted the lack of clarity in the Commissioner (Appeals)'s findings, especially concerning the ownership of the brand name "Blue Dot." The judgment emphasized the importance of legal documentation, such as the Deed of Assignment and its subsequent cancellation, in determining ownership rights. The Tribunal ultimately ruled in favor of the appellant, citing the previous order in 2004 that had established their ownership of the brand name. The judgment underscored the significance of proper legal procedures and evidence in resolving ownership disputes and eligibility for tax exemptions.

This detailed analysis of the legal judgment provides a comprehensive overview of the issues involved, the arguments presented by both parties, and the Tribunal's decision based on the evidence and legal interpretations presented during the proceedings.