Eligibility of SSI exemption in case of purchase of brand name of other person

PJ/CASE LAW/2016-17/3046

Case: COMMISSIONER OF C. EX. & S.T., AHMEDABAD-I Vs HARSH INDUSTRIES
Citation: 2015 (325) E.L.T. 889 (Tri. - Ahmd.)
Issue: Eligibility of SSI exemption in case of purchase of brand name of other person
Brief Facts: The Revenue filed this appeal against the order of the Commissioner (Appeals), whereby the adjudication order was set aside.
The respondents assessee were engaged in the manufacture of Power Driven Water Pumps. A show cause notice dated 8-2-2006 was issued, proposing demand of duty alongwith interest and to impose penalty for the period 1-4-2003 to November, 2005 on the ground the respondents wrongly availed SSI exemption and cleared the goods bearing the brand name of the other person. The adjudicating authority confirmed the demand of duty along with interest and imposed penalty. The Commissioner (Appeals) set aside the adjudication order.
Appellant’s Contention: The learned Authorised Representative on behalf of the Revenue submits that the respondents had not produced the Deed of Assignment for use of brand name during the investigation. It was only placed by them in reply to the show cause notice. It is further submitted that the respondents shown this amount as royalty in the income-tax return, which was revised after investigation. He further submits that the respondent applied for change of ownership to the Trade Mark authority. It is his contention that this document cannot be accepted as they have not taken place at the time of investigation by the Department. So, the demand of duty is liable to be upheld. It is also submitted that one of the partner of the respondent is party of brand name holders.
Respondent’s Contention: The learned Counsel on behalf of the respondent submits that Shri Pravinbhai Manilal Ajmera, Proprietor of M/s. Harsh Traders in his statement dated 12-1-2006, stated that M/s. Harsh Traders entered into Deed of Assignment with M/s. Harsh Industries to assign and use the trade mark in favour of the respondent company. So, the respondent disclosed during investigation. It is further submitted that the income-tax authority had accepted the revised return and the Central Excise department cannot go against the respondent. He further submits that Deed of Assignment was verified by the investigating officer, which is evident from the cross-examination of the concerned officer. The main argument of the respondent company is that trade mark authority accepted the brand name in favour of the respondent from 28-9-2000. In this context, the learned Counsel placed a certified copy of the trade mark certificate.
Reasoning of Judgement: They find that Trade Mark authority by Order No. TM-46/70/381, dated 31-12-2008, certified that M/s. Harsh Industries, amongst others are registered as subsequent proprietor of Trade Mark “HARSH” as from 28-9-2000 by virtue of Deed of Assignment dated 31-3-2001. As the Trade Mark authority accepted that respondent is proprietor of Trade Mark “HARSH” from 28-9-2000, then the demand of duty for the period 2003-04 to 2004-2005 on this ground is not sustainable. They have also noticed that the submissions of the Revenue before the Tribunal were refuted by the respondent. Hence, there is no need to discuss all these things.
In view of the above discussion, they do not find any reason to interfere the order of the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected and uphold the impugned order passed by the Commissioner (Appeals).
Decision: Appeal Rejected
Comment: The case is related to availment of SSI Exemption and Use of Brand Name. Earlier the assessee was using the brand name of other person. Thereafter, the Trade Mark Authority vide order dated 31-12-2008 certified that assessee registered as subsequent proprietor of impugned brand name from 28-9-2000 .
Hence with effect from 31.12.2008 the assessee became the owner of the Brand Name and therefore he is eligible for SSI exemption

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PJ/CASE LAW/2016-17/3046

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