2018 (3) TMI 1540 - AT - Central Excise

SSI Exemption - use of brand name - Revenue entertained a view that as the appellant used the brand name of LIC they were not entitled to avail the SSI notification benefits - Held that - the definition of brand name is not satisfied and the provision of clause 4 of the notification would not apply - Such dairies are being manufactured by the appellant under the job work on orders of LIC which were meant to be used as gifts by LIC and it cannot be said that the appellant has manufactured the same with the brand name of another person. Time Limitation - Held that - the demand is hit by time bar inasmuch as the fact of appellant having manufactured dairies was disclosed to the Revenue well in advance. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Entitlement to small scale exemption benefits for goods manufactured with the brand name of another person
- Application of clause 4 of the Notification denying small scale exemption benefits
- Time bar for the demand

Entitlement to Small Scale Exemption Benefits:
The appellant factory, visited by officers, was found to have manufactured dairies on a job work basis for Life Insurance Corporation of India, with the LIC logo printed. The appellant cleared these dairies under small scale exemption notifications. Revenue contended that using the LIC brand name made them ineligible for the exemption. The issue revolved around whether the appellant's manufacturing of dairies with LIC's logo constituted using another person's brand name, per the Notification's definition. The Tribunal noted that the dairies were not for sale by LIC but were gifts, thus not meeting the brand name definition. Consequently, the Tribunal found the Revenue's argument lacking merit, ruling in favor of the appellant.

Application of Clause 4 of the Notification:
The critical aspect was the interpretation of clause 4 of the Notification, which denies small scale exemption benefits for goods manufactured with another person's brand name. The Tribunal analyzed the definition of brand name provided in the Notification, emphasizing the requirement of a connection in the course of trade between the specified goods and a person using the name or mark. Given that the dairies were not intended for trade by LIC and were produced as gifts under job work, the Tribunal concluded that the brand name definition was not met, and thus, clause 4 of the Notification did not apply.

Time Bar for the Demand:
While ruling in favor of the appellant on the substantive issue, the Tribunal also considered the time bar aspect. It noted that the fact of the appellant manufacturing dairies had been disclosed to Revenue well in advance. Consequently, the Tribunal found the demand hit by the time bar. As a result, the impugned order was set aside, and both appeals were allowed with consequential relief, as pronounced in the open court.

This judgment from the Appellate Tribunal CESTAT ALLAHABAD addressed the issues of entitlement to small scale exemption benefits, the application of clause 4 of the Notification, and the time bar for the demand. The Tribunal found that the appellant, manufacturing dairies with the LIC logo as gifts under job work, did not use another person's brand name as defined in the Notification, thus entitling them to the exemption. Additionally, the demand was deemed time-barred due to prior disclosure.