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TMI Blog2022 (4) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... emark and they have always manufactured the impugned goods of impugned brands for and on behalf of M/s. PPPL. The said goods were exclusively sold to M/s PPPL and the connection of the impugned products, in the course of trade, was always with M/s PPPL and not with M/s DSHL. Apex Court has been consistently holding that the exemption is only to such parties who do not associate their products with some other person and that in order to avail the benefit of the exemption notification, the assessee must established that his products is not associated with some other person - reliance can be placed in the case ofCOMMISSIONER OF CENTRAL EXCISE, TRICHY VERSUS GRASIM INDUSTRIES LTD. [ 2005 (4) TMI 64 - SUPREME COURT] and CCE, BANGALORE VERSUS M/S. VETCARE ORGANICS PVT LTD [ 2015 (6) TMI 156 - SUPREME COURT] . In the instant case, it is found that the appellants could not establish that the brand has no connection in manufacture or trade of impugned goods with some other person that is M/s PPPL. The ownership of the brand or trademark is not taken away, even when the appellants got an assignment in their favour from the brand owner. It is found that even with respect to the assignm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted that the duty liability shall be arrived after allowing the cum-duty benefit - interest under Section 11AB of Central Excise Act, 1944 shall be on such recalculated duty; penalty under Section 11AC shall be equal to the duty confirmed after allowing cum-duty benefit. - Excise Appeal No. 392-395 of 2011 and Excise Appeal No. 86414-86417 of 2017 - A/85398-85405/2022 - Dated:- 22-4-2022 - MR. S.K. MOHANTY, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Rajiv Dinkar Waglay, Advocate for the Appellants Mrs. A. S. Parab, AC and Shri N.N. Prabhudesai, Supdt., Authorized Representatives for the Respondents ORDER Dr. Smita s Herbal Laboratories (hereinafter referred to as the appellants or M/s DSHL) are manufactures of Ayurvedic products falling under chapter 30 of Central Excise Tariff Act 1985. On the basis of an intelligence receive the affect that the appellants have cleared the products manufactured by them, having brand names Cureon , Vasundhara , Healmate and Herboral which were exclusively marketed by M/s Pitambari Products Pvt. Ltd. (hereinafter referred to as the appellants or M/s PPPL); as the said brands were owned by M/s P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Learned Shri Rajeev Waglay, Advocate, appearing for the appellants submits that the only contention of the department is that three brands Cureon , Vasundhara , Healmate were owned by M/s Pitambari Products Pvt. Ltd and hence the appellants i.e. Dr. Smita Herbal Laboratories cannot avail the exemption as per notification no.8/2003-CE dated 01.03.2003. He submits that as per the explanation A to the notification, the brand name/ trade name should not be used by other persons in relation to manufacture of specified goods and the ownership of the brand is not at all material. He submits that it is not the case of the department that the said brands are being used by M/s Pitambari Products in the manufacture of specified products; An FDA license is required for manufacture of ayurvedic medicines; it is not the case of the department that M/s Pitambari Products pvt ltd. are holding the said license for the impugned products; though M/s Pitambari had a license in respect of Vasundhara they have surrendered the same on 02.11.2006 and they never had any license in respect of other Cureon , Healmate ; as per the ER-1 returns filed by Pitambari Products for Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded cum-duty benefit. 5. Smt. A. S. Parab and Shri N.N. Prabhudesai, learned Authorized Representatives appearing for the Revenue, reiterate the findings of the OIO and OIA and submit that the exemption notifications define brand name or trade name brand name or trade name that is to say a name or a mark, such as symbol, monogram, label, signature or invented word or writing (whether registered or not) which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some persons using such name or mark with or without any indication of the identity of that person. They rely upon the following cases:- i. Commissioner of Central Excise Versus Grasim Industries Ltd. [2005(183) ELT123 (SC)] ii. Commissioner of Central Excise, Delhi Versus Ace Auto Comp. Ltd., [2011 (263) ELT3 (SC)] iii. Commissioner of Central Excise Trichy, Versus Rukmani Pakkwell Traders [2004 (165) E.L.T.481 (SC)] iv. Commissioner of Central Excise, Chandigarh-II Versus Bhalla Enterprises . [2004 (173) ELT225 (SC)] v. Commissioner of Central Excise, Thane-II Versus Amit Engg. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T-DEL] and EUMedicaments Versus Commissioner of Central Excise, Mumbai-V [2013-TIOL-149-CESTAT-MUM] 7. Learned Authorized Representatives submit that thus, it is incorrect to say that M/s PPPL was not using the brand names. Even in the compromise deed, it is a condition that all the goods manufactured by DSHL with the said brand names affixed should be exclusively sold to M/s PPPL only; further, as alleged in the notice, during the relevant period, the website of M/s PPPL was showing that these were their brands; this fact has never been refuted Appellants. Additionally, the Appellants in the written submission stated that their name was substituted in the place of M/s PPPL in 2013, it means up to 2013, M/s PPPL was having the brand names in their name. Further as per the conditions in the deeds of assignment, and the fact of marketing of the said branded goods by M/s PPPL show that the brand names were used by PPPL; The affidavit dated 09.03.2011 filed by Shri Ajay A. Joshi director of M/s PPPL categorically indicates that the brands/trademarks belong to them. Shri D.V. Mahajani Director of M/s PPPL in his statement dated 27.07.2007 made it clear that they were purchasing the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and submits that the case of General Pharmaceuticals (supra) is about trade names which did not belong to any person and therefore the facts are distinguishable; in the case of Primella Sanitary Products (supra) there was no dispute regarding the assignments and rights conferred thereof. 10. Learned Authorized Representatives further submit that the appellants cannot claimed bona fide belief; bona fide belief cannot be a blind belief; exemption notification needs to be strictly interpreted and the appellants have rendered themselves liable to penalty; they rely upon the following cases:- i. Continental Drugs Company Pvt. Ltd. Vs Commissioner Service Tax Mumbai [2015 (39) STR 154 (T-Mum)] ii. Hanuman Sahakari Dudh Vyvasaik Krushi Purak Seva Sanstha Versus C.C.E., Pune-II [2014 (309) ELT273 (Tri.- Mumbai)] iii. Motiram Tolaram Versus Union of India [1999 (112) ELT749 (S.C.)] and Mysore Metal Industries Versus Collector of Customs Bombay, [1988 (36) ELT369 (S.C.)] iv. Commissioner of Cus. (import), Mumbai Versus Dilip Kumar Compnany [2018 (361) ELT577 (S.C.)] 11. Heard both sides and perused records of the case. 12. The brief issue involved in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n licensee basis and from May 2005, they also inter alia manufactured similar products for M/s Pitambari Products Pvt. Ltd. (PPPL) viz. Cureon Oil, Vasundhara Baby Massage Oil and Healmate cream , These were trademarks/Brand names belonging to PPPL which were assigned to DSHL under various Deeds of Assignment , (DOA) entered between DSHL PPPL, only for a period of three years for the manufacture and exclusive sale of the said products back to the trademarks owner; the trademark Cureon earlier belonged to one M/s Cardinal Products Pvt. Ltd and was initially assigned by them to DSHL in the year 2005. Later on the said assignor company amalgamated with M/s Vasundhara Products Pvt. Ltd which in turn amalgamated with M/s PPPL, who are the present owners; all these trademarks have been applied for registration with the Trade Mark authorities and pending registration (during the currency of the proceedings) . 14. We find that Shri. D.V. Mahajani, Director of M/s. Pitambari Products Pvt. Ltd. that they are engaged in manufacture and marketing of various consumer products; some of them are manufactured at the factories located in Kalwa, Rabale, Baroda, Salem, Anagaon; some products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y have always manufactured the impugned goods of impugned brands for and on behalf of M/s. PPPL. The said goods were exclusively sold to M/s PPPL and the connection of the impugned products, in the course of trade, was always with M/s PPPL and not with M/s DSHL. 17. We find that Apex Court has been consistently holding that the exemption is only to such parties who do not associate their products with some other person (Grasim Industries - 2005 (183) ELT 123 (SC)) and that in order to avail the benefit of the exemption notification, the assessee must established that his products is not associated with some other person (ACE Auto Company Ltd. 2011 (263) ELT 3 (SC)). Supreme Court in the case of Vetcare Organic Pvt. Ltd. - 2015 (321) ELT 384 (SC) held, quoting thereon judgment in the case of Stangen Imino Diagnostic - 2015 (318) ELT 585 (SC) (in Para 5) that 5. .. 6 Explanation Vlll defines that brand name or trade name. As per this explanation, it would be a name or a mark such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith some other person that is M/s PPPL. The ownership of the brand or trademark is not taken away, even when the appellants got an assignment in their favour from the brand owner. We find that even with respect to the assignments there was dispute between the two parties which ended in a civil suit which was settled by withdrawal on mutual consent. We find that Tribunal in the case of Vee Gee Faucets Pvt. Ltd.(supra) held that merely because there is some arrangement between the parties giving consent for use of such brand name or trade name cannot result in nullifying the mandatory condition imposed in the notification. The notification does not provide any scope for any benefit on assignment. Thus, even on assignment of right to manufacture goods, with others Brand name or trade name by the owners thereof, such manufacturer would not be eligible for exemption under the notification. This view is upheld by the Hon ble Supreme Court in Vee Gee Faucets Pvt. Ltd. Vs. Commissioner [2015 (316) ELT A72 (SC)]. Further we find that the learned authorized representative submits that the website of M/s PPPL continued to show the brands to be belonging to M/s PPPL. Only in 2013 the brands we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide. 20. The appellants have also submitted that the adjudicating authority has not given the benefit of cum-duty benefit. We find that there is merit in the submission of the appellants. For the purpose of computation of duty the value at which the impugned goods are cleared needs to be taken as cum-duty value and the benefit thereon should be given to the appellants. 21. In view of the discussion as above we pass the following order :- i. Appeals Number E/392/2011 and E/86417/2017 are partly allowed by way of remand to the original authority; it is directed that the duty liability shall be arrived after allowing the cum-duty benefit; interest under Section 11AB of Central Excise Act, 1944 shall be on such recalculated duty; penalty under Section 11AC shall be equal to the duty confirmed after allowing cum-duty benefit. ii. E/393/2011 and Appeal no E/86414/2017 are partly allowed by reducing the penalty imposed on Dr. Smita Raste, under Rule 26 of Central Excise Rules 2002 to 5,00,000/- (Five Lac only) and 1,00,000/- (One Lac only) respectively. iii. E/394/2011 and Appeal no E/86415/2017 are partly allowed by reducing the penalty imposed on Shantanu Raste, under Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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