2018 (10) TMI 964 - AT - Central Excise

SSI Exemption - use of brand name of another person - brand name of Hot Pot and Automats owned by M/s.Asra and as such M/s.Automats (India) or not - Shri Sudhir Malhotra is a Proprietor of M/s.Asra and is the active partner in M/s.Automats (India) - N/N. 1/93-CE dated 28/02/1993 - Held that - Appellant fairly concedes that the legal issue as regards co-owner of brand names, was not specifically raised before the adjudicating authority and his attention was not brought to the decisions cited - The matters to the original adjudicating authority for fresh decision in the light of the referred judgments - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of SSI exemption Notification No.1/93-CE dated 28/02/1993 regarding the ownership of brand names.
2. Whether the use of brand names owned by a partner in a partnership firm affects the eligibility for SSI exemption.

Analysis:

1. The appeals arose from an order passed by the Commissioner concerning M/s.Automats (India) being engaged in manufacturing Beverage Vending Machines under the brand names "Hot Pot" and "Automats," which were claimed to be owned by M/s.Asra. The Revenue contended that the use of these brand names by M/s.Automats (India) made them ineligible for the SSI exemption. The adjudicating authority confirmed demands and penalties, leading to appeals. The appellant argued they had an agreement with M/s.Asra, making them the brand name owners. However, the authority relied on a Supreme Court decision stating that permission to use a brand name does not override the SSI exemption clauses.

2. The appellant's counsel acknowledged the Supreme Court's decision but argued that since M/s.Asra was a proprietary unit of a partner in M/s.Automats (India), the use of the brand name should still qualify for the SSI exemption. Citing tribunal and court decisions, the counsel contended that a partner's ownership of a brand name in a partnership firm extends to other entities they are involved in. The counsel requested a remand for fresh consideration based on these precedents, as the legal issue was not raised before the adjudicating authority initially.

3. The Revenue did not oppose the remand request. Consequently, the Tribunal set aside the impugned order and remanded the matters to the adjudicating authority for a fresh decision considering the cited judgments. Both parties were granted an opportunity to present their cases, emphasizing that the Tribunal did not delve into the case's merits. The Revenue's appeal regarding the unadjudicated show-cause notice was noted, suggesting it could have been handled separately by the Commissioner without the need for an appeal. However, the remand would include consideration of this notice along with the other matters.

4. Ultimately, all appeals were disposed of through remand, ensuring a fair reconsideration of the issues in light of the legal principles discussed. The Tribunal's decision focused on procedural aspects and the correct application of legal precedents, leaving the substantive merits of the case to be determined upon fresh consideration by the adjudicating authority.