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2017 (2) TMI 1072 - AT - Central ExciseSSI Exemption - use of brand name of others - denial on the ground that appellant found to be clearing the goods with the brand name Kanachur, which did not belong to them - The appellant has claimed that their unit is situated in a rural area, in the village of Permannur which is outside limits of Mangalore City Municipal Corporation. Accordingly, they have claimed that they will be entitled to the SSI notification even if it is considered that they have cleared the goods bearing the brand name of another person. Held that - Kanachur is the name of the village and cannot be appropriated as a brand name - also, the proprietor of the appellant was earlier the partner in M/s. Kanachur Boards who were using a similar brand name - the Revenue authorities have not brought anything on record to establish that the appellant is not authorised to use the said brand name. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Eligibility for SSI exemption when using a brand name not owned by the appellant. 2. Determination of whether the manufacturing unit is located in a rural area for SSI exemption. 3. Justification for invoking the larger period of limitation under Section 11A. Detailed Analysis: 1. Eligibility for SSI Exemption When Using a Brand Name Not Owned by the Appellant: The appellant, a manufacturer of veneers and block boards, was denied the SSI exemption because they used the brand name "Kanachur," which the department claimed did not belong to them. The appellant argued that "Kanachur" is the name of a village and cannot be exclusively owned or considered a brand name for denying SSI exemption. They also contended that the proprietor of the appellant was previously a partner in another firm using the same brand name, thereby claiming equal rights to its use. The department's stance was that since the brand name "Kanachur" did not belong to the appellant, the SSI notification benefit was not applicable. The tribunal referred to previous case laws, including CCE vs. Minimax Industries and CCE, Bangalore vs. Featherlite Seating Systems Pvt. Ltd., which supported the appellant's claim that the brand name could be used by multiple entities if not exclusively registered or claimed. 2. Determination of Whether the Manufacturing Unit is Located in a Rural Area for SSI Exemption: The appellant claimed that their unit was situated in Permannur village, outside the jurisdiction of Mangalore City Corporation, and thus qualified for SSI exemption under Notification No.8/2001-CE, which allows exemption for goods manufactured in rural areas. They provided a certificate from the Tahsildar, Mangalore, countersigned by the Deputy Commissioner, stating that Permannur was not within Mangalore City Corporation limits. However, the authorities did not extend the benefit, arguing that the certificate did not conclusively prove the rural status for the disputed period. The adjudicating authority referenced a notification from the Government of Karnataka, which included Permannur in the Mangalore Municipal Corporation, and an official memorandum indicating its inclusion in Mangalore Urban Agglomeration. The tribunal noted that the question of whether the unit was in a rural area needed to be established based on relevant notifications and certificates, and found that the lower authorities had not adequately verified these documents. 3. Justification for Invoking the Larger Period of Limitation Under Section 11A: The appellant argued that the department was not justified in invoking the larger period of limitation under the proviso to Section 11A for raising the demand. The tribunal did not provide a detailed analysis on this issue in the summarized judgment, but it is implied that the appellant contested the timeliness and validity of the demand notice. Conclusion: The tribunal concluded that the appellant should be entitled to the SSI exemption, both on the grounds that "Kanachur" is a village name and cannot be exclusively owned, and that there was insufficient evidence to prove that the manufacturing unit was not in a rural area during the relevant period. The impugned order was set aside, and the appeal was allowed with consequential benefits to the appellant.
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