2016 (10) TMI 482 - AT - Central Excise

SSI Exemption - use of brand name of others - whether after assignment agreement in respect of brand name, it can be inferred that the respondent is using the brand name of another person and accordingly not entitled for the S.S.I. exemption Notification No. 8/2001-CE dtd. 01-03-2001 or otherwise - Held that - as regard assignment agreement, there is no dispute in the facts of legal assignment of the brand in favour of the respondent vide agreement. Therefore, agreement stands legal and in force. Ld. Commissioner (Appeals) held the admissibility of exemption notification relying on the judgment of Collector of C.Ex., Ahmedabad vs Vikshara Trading & Invest P. Ltd. 2003 (8) TMI 49 - SUPREME COURT OF INDIA , wherein under identical set of facts, the S.S.I. exemption Notification was allowed despite the fact that the assignment was not registered. We find that the said judgment is squarely applicable in the present case. Therefore, here is no infirmity in the order of Ld. Commissioner (Appeals) in as much as the S.S.I. exemption was extended to the respondent on the basis of assignment agreement. - Decided against the Revenue

Summary

Issues involved:
1. Interpretation of S.S.I. exemption Notification No. 8/2001-CE dated 01-03-2001 regarding the use of brand names on products.

Detailed Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI was against the Order-in-Appeal passed by the Commissioner (Appeals), Central Excise, Mumbai Zone-I. The case involved a respondent engaged in manufacturing readymade garments under Chapter 62 of the Central Excise Tariff Act, 1985. The respondent had acquired brand names "Double Bull" and "Karl Hogan Formals by Double Bull" through an agreement of Brand Equity with M/s. Nims Apparels Ltd. The issue arose when the Adjudicating Authority denied the S.S.I. exemption under Notification No. 8/2001-CE on the basis that the respondent used another person's brand on their products, which would disqualify them from the exemption.

The Commissioner (Appeals) allowed the respondent's appeal, stating that post the brand assignment, the respondent became the brand owner, thereby justifying their entitlement to the exemption. The revenue, represented by Shri V.K. Shastri, challenged this decision, arguing that despite the assignment agreement, the brand still belonged to M/s. Nims Apparels Ltd. The revenue relied on a Tribunal judgment in a different case to support their argument. Despite notice, no representation was made on behalf of the respondent during the proceedings.

Upon reviewing the submissions and records, the Tribunal identified the key issue to determine whether, post the assignment agreement, the respondent was using another person's brand, thereby affecting their eligibility for the S.S.I. exemption. The Tribunal noted that the assignment agreement was legally valid, and the Commissioner (Appeals) correctly applied the exemption based on a precedent judgment. This judgment highlighted that even without registration, the assignment was sufficient to establish ownership for exemption purposes.

The Tribunal distinguished the revenue's relied-upon case, AVA Engineering Company, where the genuineness of the assignment deed was in question, leading to the denial of exemption. In contrast, the present case had a clear assignment agreement, ensuring the respondent's right to the brand name. Therefore, the Tribunal upheld the Commissioner (Appeals)'s decision to grant the S.S.I. exemption to the respondent based on the assignment agreement, ultimately dismissing the revenue's appeal. The order was pronounced on 20/01/2016.