TMI Blog2015 (11) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... a continues to be used on the mixer grinder as also on the cartons could be found only during the visit of the officials at the premises of the appellant. Vital facts were suppressed and thus, in our view, this is appropriate case for invoking the extended period of limitation in subsequent notice. We, therefore, do not see any infirmity in invoking the extended period of limitation in subsequent notices. Levy of penalty - From the day one it was very clear that the appellant was manufacturing the goods in their own brand name and entered into a contract with Shri A. Ramkishan, Director of R.K. Fans and Allied Products, to manufacture mixer grinder in their brand name to be exclusively supplied to them. There can be no doubt that they were manufacturing the goods in the brand name of others and that is exactly what the said notification prohibits to permit. In any case, the period involved in the present case is 2004 onwards when the decisions of the Hon ble Supreme Court on the issue were available and there could have been no doubt whatsoever relating to the interpretation of the notification. - Decided against assessee. - APPEAL No. E/1274/2011; E/25/2012 & E/85356 & 88243/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinder to anyone other than M/s. R.K. Fans Allied Products, Hyderabad or other marketing firm. Further, statements of Shri Amritlal Jain, proprietor of the appellant-company, was recorded on 27.4.2006, 26.2.2007. In the statements, he broadly confirmed the investigation details carried out. He admitted that the artwork of the logo Vipanchi was provided to them by M/s. R.K. Fans Allied Products, Hyderabad. Based upon the investigation, it appeared that the goods manufactured and bearing the brand name Vipanchi along with its logo will not be entitled to the small scale exemption Notification No. 8/2003 dated 1.3.2003. Accordingly a demand notice was issued on 16.7.2007 covering the period September 2004 to March 2007. In spite of the said show cause notice, the appellant did not take the registration or started filing the returns. Another show cause notice dated 26.6.2008 was thereafter issued covering the period April 2007 to March 2008. Similar show cause notice dated 9.4.2010 was issued covering the period April 2008 to March 2009, another show cause notice dated 8.7.2010 was issued covering the period April 2009 to March 2010 and yet another show cause notice dated 30.8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks Registry and part of the period is thereafter. In fourth and fifth show cause notices, the period involved is after obtaining the registration from the Trade Marks Registry. In respect of the last three show cause notices, the ground taken by the Revenue is that the symbol of Veena is the logo of M/s. R.K. Fans and Allied Products, Hyderabad, and the same is being printed on the mixer grinder as also on the cartons and the said symbol/logo has not been registered by the appellant with the Trade Marks Registry. Further, the carton of the said mixer grinder depicts the name of the marketing firm of Shri A. Ramkishan. According to the Revenue, in view of the symbol/logo on the mixer grinder as also the above factual aspect, even the goods manufactured post taking the registration would fall outside the scope of SSI Notification No.8/2003. 6. The learned counsel for the appellants main submission is that, as per the memorandum of understanding dated 10/06/2005, the brand Vipanchi has been assigned to the appellant in April, 2004 itself and in view of this position it is an incorrect assertion that the band-name Vipanchi belongs to M/s. R.K. Fans Allied Products, Hyderaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of understanding, was made by the appellant or Shri A. Ramkishan during the course of investigation. On the contrary, Shri M. Krishna very categorically stated in his statement that the brand name Vipanchi belongs to them. Neither Shri Amritlal Jain or Shri M. Krishna had at any point of time, talked about the said memorandum of understanding. During investigation, what was claimed was that Shri M. Krishna, Director of M/s. R.K. Fans and Allied Products, Hyderabad, got the mixer grinder manufactured from the appellant in the brand name Vipanchi which belonged to M/s. R.K. Fans and Allied Products. It is also submitted that the so called as memorandum of understanding was submitted after about 13 months of the issuance of the first show cause notice and at the time of personal hearing. The learned Additional Commissioner (AR) also submitted that the document submitted is only memorandum of understanding which has no legal force whatsoever. It is not even notarised leave alone registered. It is not even an agreement between the appellant and Shri M. Krishna, which can be enforced in a court of law. A perusal of the said memorandum of understanding would indicate that this cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y invoked. 8. In rebuttal, the learned counsel submitted that the decision in the case of Meghraj Biscuits Industries Ltd. (supra) is not applicable in the present facts and circumstances of the case, as in the said judgment, the Honble Supreme Court has observed that there is no deed of assignment to M/s. Meghraj Biscuits Industries Ltd. Similarly, the other judgments quoted by the by the AR are distinguishable due to the facts of the present case. It was also submitted that the show cause notices issued post April 2008, after the receipt of the Trade Mark Registration certificate by the appellant are on the ground that the name of the marketing firm on the carton amounts to brand-name and picture of Veena is appearing on the carton as well as on the mixer. The learned counsel further submitted that the brand-name belongs to the appellant and writing the name of the marketing firm/or printing Veena on carton/mixer grinder will not disentitle the benefit of SSI Notification. He relied upon the following case laws in support of his contention that merely because the goods are distributed by some other company whose name and logo are also printed on cartons of its specified g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 person using such name or mark with or without any indication of the identity of that person; Thus in brief if a SSI unit manufactures specified goods bearing a brand/trade name of other person, benefit of SSI exemption is not available. 10. Before examining the applicability of the above mentioned Exemption Notification, the factual matrix emerging in the case is as under:- Shri A. Ramkishan, Director of M/s. R.K. Fans Allied Products Pvt. Ltd., along with its marketing company, M/s. Vipanchi Marketing Pvt. Ltd., are engaged in the business of trading, manufacturing and marketing of electrical ceiling fans with a brand name Vipanchi along with a logo of Veena and the same are sold in the markets in Andhra Pradesh and Maharashtra States. The said brand/trade name has considerable goodwill in this area. Shri A. Ramkishan though of extending his business by selling mixer grinder under his brand name Vipanchi along with logo and for this purpose he approached the appellant firm and ordered for manufacture of mixer grind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been fixed at ₹ 750/- per piece excluding the tax etc. It also details about the testing and okaying of the goods as also the guarantee period etc. Para 3 does not indicate that Shri A. Ramkishan has assigned the said brand name to the appellant. It only talks that the appellant will complete all required procedure and formalities for registration of trade mark Vipanchi and the name with the logo in class 7 on their firm/company/individual name for which Shri A. Ramkishan does not have any objection. It is also seen that the memorandum of understanding is valid for five years and thereafter required to be renewed. In our opinion, the said memorandum of understanding which is not even notarized or registered and is not even an agreement, cannot be considered as a deed of assignment. It is at the most understanding between the appellant and Shri A. Ramkishan about the business model. 10.2 Another important development that had taken place on 1st February 2007 is that the appellant applied to the Trade Marks Registry for registration of the brand name Vipanchi and the appellant was granted registration on 7th October 2008. It is interesting to note that the appellant d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 165) E.L.T. 481 (S.C.) (Civil Appeal Nos. 3227-3228/1998) wherein we have held in respect of another Notification containing identical words that it makes no difference whether the goods on which the trade name or mark is used are the same in respect of which the trade mark is registered. Even if the goods are different so long as the trade name or brand name of some other Company is used the benefit of the Notification would not be available. Further, in our view, once a trade name or brand name is used then mere use of additional words would not enable the party to claim the benefit of the Notification. In view of the above decisions of the Hon ble Supreme Court, the fact that the appellant was using the brand name Vipanchi on mixer grinder while their customer was using the same brand name on other products, does not help the cause of the appellant. 10.5 Second issue is that goods were bearing brand name Vipanchi along with logo of Veena belonging to R.K. Fans and Allied Products Ltd. while what is registered was Vipanchi . Further, the Hon ble Supreme Court in the case of CCE, Trichy vs. Rukmani Pakkwell Traders reported in 2004 (165) ELT 481 (SC), in para 7, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court held that the assessee will not be entitled to the benefit of exemption if it uses on goods in question, same/similar brand name with intention of indicating a connection with the goods of the assessee and such other person or uses the name in such manner that it would indicate such connection. It was further held that the burden is on the assessee to satisfy the adjudicating authority that there was no such intention [See : paras 6 and 7]. 16. Lastly, we are required to examine the retrospective effect of the registration certificate dated 30-6-2000 with effect from 30-9-91. At the outset, we may reiterate that the object of the exemption notification was neither to protect the owners of the trade mark nor the consumers from being misled. These are considerations which are relevant in disputes arising under the Trade Marks Act. The object of the exemption Notification No. 1/93-C.E. was to grant benefits to those industries which do not have the advantage of a brand name. However, since retrospective nature of the registration certificate dated 30-6-2000 is repeatedly being raised in this Court we would like to examine the case law in this regard. 19. On readi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the manufacturer. The agreement between manufacturer and the owner of the brand name may entitle the manufacturer to use such brand name for his product without any objection from the owner of the brand name. But that by itself will not result in amending the conditions of exemption notification. The exemption notification clearly requires that the benefit thereunder would not be available to the manufacturer of the cement bearing a brand name or trade name, whether registered or not, of another person. It does not make any exception when such use is permitted by the owner of the brand name. Irrespective of the fact whether the manufacturer has full consent of the owner of the brand name to use such brand name for his product or not, the use of such brand name would disentitle the manufacturer of cement from claiming any benefit under the said notification. 11.2 This Tribunal had occasion to again examine similar issues in the case of Vee Gee Faucets P. Ltd. (supra). In the said case, this Tribunal in para 11 to 14, 16, 21 to 23, has observed as under:- 11. The notification explains the term brand name or trade name to mean a brand name or a trade name, whether re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson and the explanation clarified the said term brand name or trade name as above while reiterating the decision in Rukmani Pakkwell Traders case held that even if the goods are different so long as the trade name or brand name of some other Company is used, the benefit of the Notification would not be available and further, once a trade name or brand name is used then mere use of additional words would not enable the party to claim the benefit of the Notification. 13. In Bhalla Enterprises case while observing that there was no reason to differ from the reasoning in the earlier decisions in Rukhmani Pakkwell Traders and Mahaan Dairies case it was held by the Apex Court that Clause 4 of Notification No. 1/93-C.E. exempted certain goods upto a particular value and excluded such benefit in case of product bearing brand name or trade name of others and that therefore, Clause 4 of the said Notification clearly disapproved the benefit of the exemption in cases where someone elses name in connection with their goods was used either with the intention of indicating in a manner a connection between the assesses goods and such other person. There is no requirement for the owner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to avail the benefit thereunder. It is well settled law that the exemption notifications are to be strictly construed. A notification which grants the benefit in the form of exemption from payment of duty when it requires the claimant of such benefit to comply with certain condition, the claimant has no option but to comply with such condition to enable him to avail the benefit under such notification. 16. Plain reading of the Notification nowhere discloses that the exemption thereunder can be availed for the product bearing brand name or trade name of other person on the basis of consent of the proprietor of such brand name or trade name. Neither it discloses that assignment of right in relation to brand name or trade name by the proprietor thereof in favour of manufacturer of goods would exclude such manufacturer from the exclusion clause in the notification. It is well established that the product which carries the brand name or trade name whether registered or not of another person, such product would be non-eligible to claim the benefit under the notification. That is the law laid down in clear words by the Apex Court in Bhalla Enterprises and reiterated in Meghraj Bisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even after issuance of the first show cause notice of 16th July 2007. We also note that the SSI units are generally required to file quarterly returns. It is also noted that the fact that the symbol Veena continues to be used on the mixer grinder as also on the cartons could be found only during the visit of the officials at the premises of the appellant. Vital facts were suppressed and thus, in our view, this is appropriate case for invoking the extended period of limitation in subsequent notice. We, therefore, do not see any infirmity in invoking the extended period of limitation in subsequent notices. 13. The appellant has also stated that penalty is not imposable since the issue relates to the interpretation of notification. We are not impressed with the said argument. In the present case, from the day one it was very clear that the appellant was manufacturing the goods in their own brand name and entered into a contract with Shri A. Ramkishan, Director of R.K. Fans and Allied Products, to manufacture mixer grinder in their brand name to be exclusively supplied to them. There can be no doubt that they were manufacturing the goods in the brand name of others and that is exa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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