2018 (11) TMI 1456 - AT - Central Excise

Destruction of goods - remission of duty - Manikchand brand Gutkha/ Pan Masala, which the appellant was not in a position to sale in the market due to order of the District Judge, Mandaleshwar Court, on the issue of brand name - Held that - It was beyond the control of the appellant to market the said goods. The Adjudicating Authority rejected the application on various counts which are absolutely irrelevant. As regards the reference made to a case of infringement of Intellectual Property Right, the Commissioner has no jurisdiction at all for drawing inference and holding that the appellant had malafide intention. The ld. Commissioner on his own viewed that the goods packed in Manikchand brand should have been repacked in RMD brand and sold. This is also beyond the jurisdiction of the ld. Commissioner for the reason that whether the goods can be repacked and sold it is completely on the assessee to decide after analyzing the practicability, feasibility and viability. There is no dispute that the goods for which remission was claimed, were packed in the brand name of Manikchand and due to injunction order passed by the District Judge, Mandaleshwar, the said goods, in such a condition, was not capable of being sold by the appellant. Therefore, this is a clear case that the goods were unfit for marketing and squarely cover under the provisions of Rule 21 of Central Excise Rules, 2002. Matter remanded to the Adjudicating Authority for reconsideration of appellant s remission application - appeal allowed by way of remand.

Summary

Issues:
1. Rejection of application for destruction of goods and remission of duty.
2. Allegation of malafide intention by using a brand name under injunction.
3. Jurisdiction of the Adjudicating Authority in deciding on the brand name issue.
4. Applicability of remission application due to goods being unfit for marketing.

Analysis:
1. The appellant, engaged in manufacturing Pan Masala/Gutkha under the brand name "Manikchand," faced an injunction order prohibiting the use of this brand name. Consequently, they filed applications for destruction of the existing stock and remission of excise duty, which were rejected by the Adjudicating Authority.

2. The Adjudicating Authority alleged malafide intention on the appellant's part for using the brand name "Manikchand" despite the injunction. The appellant argued that the issue of brand name infringement was debatable and had reached the Supreme Court, questioning the Authority's jurisdiction to make such claims.

3. The jurisdiction of the Adjudicating Authority in deciding on the brand name issue was challenged by the appellant. They contended that the Authority overstepped by suggesting the goods could have been repacked and sold under a different brand, emphasizing the practical difficulties in repackaging small pouches of Pan Masala/Gutkha.

4. The Tribunal found that the rejection of the remission application was unjustified as the appellant was unable to market the goods due to the injunction. The Commissioner's inference of malafide intention and suggestions for repackaging and export were deemed beyond his jurisdiction. The Tribunal emphasized the appellant's right to claim destruction of goods and remission of duty under Rule 21 of the Central Excise Rules, 2002.

5. Consequently, the Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for reconsideration and disposal in accordance with the law, recognizing the appellant's situation of having goods unfit for marketing due to the brand name injunction.