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2016 (10) TMI 136 - CESTAT MUMBAI

2016 (10) TMI 136 - CESTAT MUMBAI - 2016 (339) E.L.T. 604 (Tri. - Mumbai) - SSI Exemption - Denial of - use of brand name or logo of another person - extended period of limitation - Cum-duty benefit - Held that:- we find certain force in the submissions made on behalf of the appellants that they have not used the brand name or logo of anybody else and the brand name quality used by them on their products, in the manner and style, is their own brand name, which is different from the brand name/lo .....

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and could not on a fair appraisal of the marks indicate any such connection, then the benefit of exemption would be available. We also find that the Hon’ble Supreme Court in Meghraj Biscuits [2007 (3) TMI 5 - SUPREME COURT OF INDIA] also has held that registration with the trade mark registry cannot be the sole criteria for allowing or denying SSI exemption. We find that the Hon’ble Apex Court in the case of Stingen Immuno Diagnostics [2015 (6) TMI 155 - SUPREME COURT OF INDIA] has held that the .....

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name, the product, the person and the use of brand name belonging to someone else, for denying the SSI benefit. - In the present case, the Dept. has proceeded mainly based on the Hon’ble Apex Court judgment in Rukhmini Packkwell (supra) and there was no occasion for the Adjudicating Authority to examine other judgments of Hon’ble Apex Court cited by the appellants and come to a proper conclusion. We find that the ratio of the judgment in M/s. Stangen Immuno Diagnostics (supra) goes to the r .....

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ex Court discussed above. - Invokation of extended period of limitation - eligibility for SSI exemption - Demand - appellant contended that the brand name quality belongs to them because of their continued and uninterrupted use for long period of time and, therefore, they were not expected to inform the Dept. that they are using somebody else brand name on their products. Till the proceedings initiated by the Dept. they were not aware that the brand name quality used by them on their product .....

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e quality, in the manner & style used by them, belongs to them alone and nobody else. - We also find that the demand covered in Appeal No. E/1236/09, beyond the normal period one year also cannot sustain, as the fact of using the disputed brand name quality on Cakes & Pastries was well within the knowledge of the Department when first SCN dated 3.5.2005. Therefore, the Dept. cannot allege suppression to invoke extended in subsequent SCN pertaining to appeal No. E/1236/09, which is supported .....

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n a bona fide belief that the brand name quality is owned by them; therefore, they are eligible for SSI exemption under relevant Notification. We, therefore, hold that the entire demand covered under Appeal No. E/3158/2006 and demand beyond normal period of one year in Appeal No. E/1236/2009 is barred by limitation and, therefore, not sustainable. - Cum-duty benefit - Held that:- since the Adjudicating Authority has already granted the benefit of cum-duty in the Order impugned in the first .....

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of SSI exemption for the products - Held that:- the issue in dispute relates to interpretation of law and there can be a possibility of differing interpretations of the same. Considering overall facts and circumstances of the case, holistically we are of the view that there was no willful suppression of facts or mis-statement on the part of the appellants. Therefore, the penalties imposed on them are not sustainable. Accordingly, we set aside the same. - Appeals disposed of - Appeal No. E/3158/2 .....

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passed by Commissioner as an Adjudicating Authority and/or Commissioner (Appeals) as first Appellate Authority, as summarised in the annexure to this order. 2. The facts relevant for decision of the present appeals are that the Appellants are manufacturing Cakes & Pastries falling under Tariff Item 1905 90 10, under their brand name Kwality since more than three decades and the said Kwality branded Cakes & Pastries are known and associated with the products being manufactured by them. Th .....

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cket Tea, M/s.Kwality Petha House for Petha Dalmoth, Gajak, Rabery, Bhujia, Chips & Sweet preparations and Shri Govind Kumar of Agra for Confectionery are also using the brand name Kwality for their various products. Accordingly, Show Cause Notice dated 3.5.2005 was issued by the Additional Director General, DGCEI, Mumbai, proposing to deny SSI exemption for the period 2000-2001 to 2002-2003, which was confirmed by the Commissioner, vide Order-in-Original dated 31.07.2006 and the Appellants .....

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; that the brand name Kwality was owned by and registered in the name of M/s. Pure Ice Cream Co. Pvt. Ltd., Bombay and M/s. Kwality Ice Cream Pvt. Ltd., Calcutta for Ice Cream is not in dispute; that the issue is fully covered by the Hon ble Supreme Court decision in CCE v/s Rukmani Pakkwell Traders, reported in 2004 (165) ELT 481 (SC), which has been endorsed by Hon ble Apex Court in the case of CCE v/s Bhalla Enterprises, reported in 2004 (173) ELT 225 (SC); that if a manufacturer uses the reg .....

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a seal like device whereas the appellants brand name is with a bakemans symbol in a semi-circle attached to a rectangle with the word quality inside the same which are totally dissimilar on its appearance itself; samples of brand name quality used by M/s. Pure Ice Cream Co. for their ice cream and the quality brand name used by the appellants for their Cakes & Pastries were brought to our notice to differentiate the same on appearance; that there are various other parties using the brand na .....

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ourt in Bhalla Enterprises (supra) has clearly held that if the use of others brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, then the benefit of exemption would be available; that the said case considers judgments in Mahan Dairies - 2004 (166) ELT 23 (SC) and Rukhmani Pakkwell (supra); that Hon ble Supreme Court in Meghraj Biscuits, reported in 2007 (210) ELT 161 (SC) has held that registration with the trade mark registry cannot b .....

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Fine, reported in 2006 (193) ELT 77 (T) has held that the same brand name can be for different products and SSI exemption cannot be denied; that registration of trade mark by someone would not entitle to that person to interfere with or restrain the use of identical trade mark by any other person, provided that the said person, or his predecessor, has continuously used their trade mark from a date prior to the registration of trade mark by the third party; that the Appellants have been using th .....

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t quality is known as a brand name for Cakes & Pastries manufactured by the appellants our attention was drawn to the certificates/ letters from traders dealing with the Cakes & Pastries manufactured by the appellants; that the usage of the brand name quality since decades and the establishment of identity of the said brand name with the goods manufactured by the appellants substantiate that the brand name quality belongs to them; that for claiming exemption under Notification No.8/2003- .....

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dence; that the usage of brand name quality on their products is not with any intention to indicate any connection of their products with that of M/s. Pure Ice Cream Co.; that till initiation of the proceedings, the appellants were not even aware that quality brand is owned or registered in the name of M/s. Pure Ice Cream Co. or other parties as mentioned in the SCNs; that benefit of Notification is not deniable to them based on the Apex Courts decision in Bhalla Enterprises (supra); that their .....

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n that for disentitlement of exemption, the usage of brand name should indicate a connection in the course of trade, which is absent in the present case and the Department has also failed to prove the same; that the very fact that various other persons are also using the brand name quality for different products would support the appellants contention that their use of quality brand name is purely accidental and not intentional; that the brand name quality belongs to a family concern initially .....

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ed Water Works, reported in 2015 (320) ELT 692 (SC); that the valuation in first appeal is done based on certain hypothetical average prices; that the Appellants were offering 17% discount upto 1.4.2003 and 28% discount w.e.f. 1.4.2003 and this discount ought to have been reduced from the turnover arrived at by the Dept.; that when the Commissioner granted cum-duty benefit in the Order dated 31.7.2006, which is not challenged by the Dept. said benefit should have been extended in all other cases .....

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style in which it is used by them; that second SCN invoking extended period is not sustainable, when first SCN has already been issued on the very same issue; that based on aforesaid reasons and submissions, penalties imposed are also not sustainable and, in any case, when issue relates to interpretation of law extended period and/or penalty is unwarranted. The learned Counsel for the Appellants have submitted certain compilations of provisions and case laws in support of his various proposition .....

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nexus with the said brand/person; that Search Report of M/s. Varikasery & Varikasery, Trade Mark and Patent Attorneys, dated 21.12.2001 (mentioned in para 30 of Order-in-Original No.19/2006 dated 31.07.2006 in Appeal No. E/3158/06) confirmed that the brand name quality was already registered in the name of Pure Ice Cream; that applications for registration of Shri Harbans Lal of Uttar Pradesh for Namkeens and Biscuits, Shri Nitin Kumar Goyal for Tea and Packet Tea, Shri Govind Kumar of Agra .....

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thereof; that if any manufacturer claim the benefit of any of Notification, the onus to prove eligibility to such claim is upon the said person for entitlement of the said claim; that the appellants cleared the goods under brand name quality without taking registration and without informing the Department; therefore extended period is very well invocable in the present case. The learned AR has also relied upon various judgments. 5. We have considered the rival submissions and perused the records .....

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ukhmani Pakkwel (supra) relied upon by the Dept. has been considered by the Hon ble Apex Court in the case of Bhalla Enterprises (supra) and held that if the use of others brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, then the benefit of exemption would be available. We also find that the Hon ble Supreme Court in Meghraj Biscuits (supra) also has held that registration with the trade mark registry cannot be the sole criteria for a .....

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rson, benefit of SSI exemption is not available to such person, which emphasis that there should be a connection/nexus between the brand name, the product, the person and the use of brand name belonging to someone else, for denying the SSI benefit. In the present case, the Dept. has proceeded mainly based on the Hon ble Apex Court judgment in Rukhmini Packkwell (supra) and there was no occasion for the Adjudicating Authority to examine other judgments of Hon ble Apex Court cited above by the app .....

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consideration of the issue of brand name and availability of SSI exemption under relevant Notifications in the light of our observations and the ratio judgments of Hon ble Apex Court discussed above. 5.2 As regards the appellants claim of time bar of the demand covered under Appeal No. E/3158/2006 and Appeal No. E/1236/2009, we find that it has been their consistent stand that the brand name quality belongs to them because of their continued and uninterrupted use for long period of time and, the .....

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ts had suppressed from the Department their manufacture of quality branded products, despite the fact that this brand did not belong to them, lacks credence and the Dept. have not brought any evidence to support such an allegation. We find that even today the Appellants are claiming that the brand name quality, in the manner & style used by them, belongs to them alone and nobody else. We also find that the demand covered in Appeal No. E/1236/09, beyond the normal period one year also cannot .....

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in view of differing views expressed by Hon ble Apex Court at different point of time and, therefore, the benefit of doubt should go to the Appellants. Therefore, we are of the view that it cannot be held that there was an attempt on the part of the Appellants to suppress any facts and they have acted on a bona fide belief that the brand name quality is owned by them; therefore, they are eligible for SSI exemption under relevant Notification. We, therefore, hold that the entire demand covered un .....

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