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2015 (12) TMI 203 - CESTAT MUMBAI

2015 (12) TMI 203 - CESTAT MUMBAI - 2016 (332) E.L.T. 860 (Tri. - Mumbai) - Denial of SSI Exemption - Clubbing of clearances by the proprietorship firm holding 90% in the Limited Company - Whether own brand name assigned to others and SSI unit cannot claim the exemption - Held that:- Board has specifically stated and clarified that Limited Companies whether public or private are separate entities and partnership firm is separate entity than the Ltd. Company. In the case in hand, the Limited Co. .....

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prietorship firm Vinky & Co. and ICPL cannot be clubbed for arriving at the total clearances of ICPL.

Brand name “Irony” was registered with the authorities in the name of Venky & Co. and from the deed of assignment it could be deduced that the said Brand name was assigned to the appellant ICPL in this case. Nothing is brought on record to show that even after assigning the Brand “Irony”, Venky & Co. were using and clearing the products with the said Brand name. In the absence of any .....

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duty to the appellant.

Reason to interfere with the impugned order as the adjudicating authority has given an option to redeem the same on payment of fine of ₹ 50,000/- which, in facts of this case is seems to be reasonable - appellant could have entertained a bonafide belief and the issue being interpretation of Notification the penalties imposed on the appellants are harsh and needs to be set aside - Decided partly in favor of assessee. - Appeal No. E/1034 and 1035/05 - ORDER .....

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d by the assessee. 3. The relevant facts that arise for consideration are during the period 01.05.2001 to 30.06.2001, the appellant assessee who are manufacturers of readymade garments were visited by the officers of the Preventive Section and on withdrawal of certain documents it was noticed that there was contravention of provisions of law. Accordingly, the readymade garments valued at ₹ 12.66 lakhs were seized and after investigation, show-cause notice was issued. The show-cause notice .....

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lso made. Show-cause notice was adjudicated by the authorities and order-in-original dated 23.02.2004 was passed confirming the demands raised, interest thereof and penalties on the appellant assessee as well as the individual and confiscation of seized goods were also ordered. On an appeal being preferred, this Tribunal vide order dated 01.07.2004 remanded the matter back for denovo adjudication relying upon the judgement of the Apex Court in the case of M/s Arca Controls Pvt. Ltd. - 2003 (158) .....

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e share. He would then submit that by a Deed of Assignment dated 25.06.2001, the Brand IRONY was assigned to M/s. Irony Clothing Pvt. Ltd. for token consideration of ₹ 10,000/-. He would submit that the Brand name registered in the name of Venky and Co. was assigned to the appellant, subsequently held as the Brand name being someone else is incorrect. He would submit that in the case of Brand terminator is unable to make any submission of any assignment deed, as the Company is closed and n .....

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also submit that this direction was issued by Revenue under the provisions of Section 37B of the Central Excise Act, 1944. He would rely upon the judgement of the Hon ble Supreme Court in the case of M/s Arca Controls Pvt. Ltd. (supra). 5. Learned D.R. on the other hand would draw our attention to the show-cause notice and order-in-original. He would submit that there were 1937 pieces of readymade garments with Brand name affixed to them and sought to be cleared without payment of duty as eligi .....

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ad started the Company and continued till June 2001 and June 2001 ICPL was incorporated with and he purchased all the machineries of Venky and Co. He would submit that it indicate Venky and Co. and the assessee appellant in these appeals are the same, hence clubbing of the clearances of Venky & Co. and the appellant assessee is correct. He would submit that the Brand Irony and Terminator belonging to Venky & Co. was a Brand belonging to some other person and hence benefit of SSI exemptio .....

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SSI exemption cannot be claimed. His further submission is that the Apex Court in the case of Vetcare Organics P. Ltd. - 2015 (321) ELT 384 (S.C.) has held that permission to use another Brand name does not amount that the user become owner of such Brand name even if permission is given by the actual owner of the Brand. As regards the clubbing of clearances he would submit that the reliance placed on Board s Circular is incorrect. 6. We have considered the submissions made at length by both side .....

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being brand name of another person were liable for confiscation or otherwise. 7.1 After considering the submissions made by both sides and on perusal of the records, we find that as regards the issue No.1 the entire arguments of the learned Consultant is Venky & Co. is sole proprietorship firm while ICPL is a Private Limited Company hence, clearances cannot be clubbed as also for the reason that both the entities are geographically located at different places, while it is the findings of th .....

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. The Board had then felt the position as mentioned above including in respect of Notification No. CER-8(5)-CE dated 01.03.1956 was sufficient to deal with the interpretation under Notification No.176/77 dated 18.6.1977. Now in exercise of the powers conferred under Section 37B of the Central Excise Act, 1944 for the purpose of ensuring uniformity of levy of duties of excise, the Central Board of Excise and Customs have ordered that the general principles as mentioned above in the context of Not .....

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6-CE:- (i) The question whether different partnerships having common partners are treatable as separate manufacturers or the same manufacturer, would be a question of fact in each case to be determined on the basis of such factors among other, like composition of the partnership, existence of the factory, licence, nature of goods manufactured etc. (ii) Different firms will be treated as different manufacturers for the purpose of exemption limit. But if a firm consisting of certain partners say A .....

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f one firm or individual owns several factories, he or it gets exemption only in respect of one individual owns several factories, he or it gets exemption only in respect of one lot and the manufacturer being only one entity there will be no question of distributing the exemption. (iv) Whether or not in the expression by or on behalf of a manufacturer the expression from one or more factories is added, the effect would be the same if the manufacturer is also the same. The expression one or more .....

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mpany. In the case in hand, the Limited Co. being separate entity and distinct from shareholders, it cannot be said that Shri Venkatesh having 90% of shares in ICPL by virtue of being proprietor of Venky & Co., the clearances could be clubbed. In our view Revenue is arguing against their own Circuar which is incorrect. This view was taken by the Hon ble High Court of Madras in the case of Campion Plastic Industries Ltd - 1996 (84) ELT 189. Accordingly, we hold that the clearances effected by .....

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impugned order in unnumbered paragraph at internal page No.15 of order-in-original has recorded as under:- So far as the Brand name is concerned, the assessee has submitted a proof that the Brand name Irony had since been registered in their name in the Certificate No. 300446 dated 31.05.2004 with effect from 24.11.1997. The Certificate was sent for verification and the Trade Marks Authority had certified the same as true. It is a settled law that unless a Trade Mark or Brand Name was registered .....

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