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2022 (4) TMI 1358 - AT - Central ExciseSSI Exemption - use of brand name of others - brand name assigned in favor of appellant or not - products bearing the brand names “ Cureon” , “Vasundhara”, “Healmate”, assign to them by M/s Pitambari Products Pvt. Ltd. as per agreements - violation of provisions of N/N. 8/2003 CE- dated 01.03.2003 - period June 2005 to February 2011 - Extended period of limitation - levy of penalties - eligibility for duty-cum benefit - HELD THAT:- On going through the agreements, it is found that the ownership in respect of the trade marks/Brand names were always with M/s. PPPL, even during the currency of assignment; at no point of time the title of the ownership of the brands or trademarks were passed on to the appellants; the agreement was not intended to convey, transfer or passed on the ownership, title or rights of the assigners. The facts of the case conclusively establish that the appellants i.e. M/s DSHL were never owners of the title of the Brand Name/trademark 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 assignments there was dispute between the two parties which ended in a civil suit which was settled by withdrawal on mutual consent - Tribunal in the case of VEE GEE FAUCETS P. LTD. VERSUS COMMISSIONER OF C. EX., GURGAON [2010 (3) TMI 710 - CESTAT, NEW DELHI] 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. Extended period of limitation - HELD THAT:- The department had no wherewithal to find out the availment of benefit in violation of the conditions of the Notification and consequential evasion of duty by the appellants. The appellants cannot take the plea of bona fide belief. Therefore, extended period is rightly invoked in this case. Levy of equal penalty on the company as well as the Director in addition to penalty of other director of the appellants and the Director of M/s PPPL - HELD THAT:- Going through the facts of the case and the role played by directors of the appellants, it is found that the penalty is quite harsh and is not commensurate with the part played. Therefore, the penalties imposed on the directors of the appellants, is reduced. Levy of penalty on M/s PPPL - HELD THAT:- The role played by them in the evasion of duty by the appellant is not clearly coming forth. M/s PPPL have assigned/allowed the appellants to used their brand names in the manufacture of specified goods and have purchased and marketed entire production of the appellant. It was for the appellants to pay appropriate Central Excise Duty and for the nonpayment of the same M/s PPPL cannot be faulted with. Therefore, the penalty imposed on the director of M/s PPPL need to be set aside. Benefit of cum-duty benefit - HELD 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. Appeals 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.
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