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TMI Blog2018 (12) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... tly, Central Excise duty of Rs. 52,84,284/- was confirmed against the appellant No. 1 along with interest and equal amount of penalty under various provisions of the Central Excise Act, 1944 (in short "Act"). Personal penalties of Rs. 10,00,000/- and Rs. 50,000/- were imposed on the appellant Nos. 2 and 4 respectively for their acts/ omissions prohibited by Rule 209A of the erstwhile Central Excise Rule, 1944 read with Rule 26 of the Central Excise Rules, 2001/ 2002. As regards the second Show Cause Notice, the Learned Commissioner was of the view that the appellant No.1 had purchased semi-finished goods, upon which further manufacturing had been undertaken at its Sales cum Service Centre and cleared the same in the guise of trading activity. On this count, Central Excise duty demand of Rs. 24,21,120/- was confirmed for the period December, 1999 to March, 2004, along with interest and equivalent penalty against the appellant No. 1 under various provisions of the Act. The appellant No. 3 was also subjected to personal penalty of Rs. 25,000/- under Rule 209A of the erstwhile Central Excise Rules, 1944 read with Rule 26 of the Central Excise Rules, 2001/ 2002. 3. In brief, the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Rules, 1944 read with Rule 26 of the Central Excise Rules, 2001/ 2002. (iv) That in the second Show Cause Notice it was alleged that appellant No. 1 used to purchase semi-finished goods, upon which further manufacturing processes were undertaken at the Sales cum Service Centre, Lake View Road, Kolkata and cleared the said manufactured goods without payment of duty in the guise of trading activities. The said Show Cause Notice proposed to demand duty of Rs. 24,21,120/- under the proviso to Section 11A(1) of the Act for the December, 1999 to March 2004 along with interest and equivalent penalty. The appellant no. 3 was required to show cause against the imposition of personal penalty under Rule 209A of the erstwhile Central Excise Rules, 1944 read with Rule 26 of the Central Excise Rules, 2001/ 2002. (v) That after submission of a common reply to the aforesaid Show Cause Notices, personal hearing was held. The Learned Commissioner thereafter passed a consolidated Order-in-Original dated 23.03.2007 and confirmed the demands by holding, inter alia, as follows: First Show Cause Notice a) 'SEN & PANDIT' was a Brand Name, as reflected by repeated use of the said expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows: (i) 'SEN & PANDIT' was not a Brand Name as defined in the SSI Exemption notifications. It was only the first part of the appellant No. 1's full name and, incidentally, shared by M/s SPPEL. The appellant No. 1 had clarified the same in its letter dated 20.08.2004. The appellant No. 1 had every right to use its own full name/ part of full name which could not have disentitled it to SSI benefits. (ii) The make and appearance of the disputed stickers as also their manner of use proved that the appellant No. 1 had neither used nor intended to use 'SEN & PANDIT' for the purpose of indicating any connection between its own products and M/s SPPEL. The disputed labels/stickers were, at best, decorated logos showing the full name of appellant No. 1 in a stylish manner along with particulars like "AMP", "INPUT", "OUTPUT" "SL. NO." etc. (iii) Appellant No. 1 had applied for registration of its Brand Names such as "SPEL, "POWERSYS", "SEN & PANDIT Electronics Pvt. Ltd.-SPEL". This was a clear pointer that 'SEN & PANDIT' was never regarded as a Brand Name. (iv) M/s SPPEL had applied for registration of a different set of logo/ expression i.e. SEN & PANDIT preceded by a Devise (SP). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tage stabilizers and sold the same from its Lake View Road premises. Functions like testing, quality control, affixation of stickers etc. neither rendered the said voltage stabilizers marketable nor led to the emergence of new products having different commercial identities. The appellant No. 2, in his statement dated 09.04.2003, while answering question Nos. 2 and 5, had categorically mentioned that the appellant No. 1 did not have any manufacturing unit in India except the Sonarpur factory. At the Sales cum Service Centre only post-sale services, quality control works, affixation of stickers etc. had been done. Resetting of pre-set alignment, setting of feedback resistance etc. had been undertaken solely for quality control purpose and/ or repair of damaged products, which was non-routine in nature. 8. The Learned counsel further thereafter submitted that the purported statements of various vendors relied upon in the Show Cause Notices as well as in the Order-in-Original suffered from numerous inherent contradictions and confusing remarks. In absence of any corroborative evidence, the appellant No. 1 could not have been saddled with liability on the basis of unreliable statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been rightly confirmed. As such, no interference is called for in the impugned Order. 11. Heard both sides and perused the appeal records. We find that the following issues arise for our consideration in the instant appeal :- I. Whether the appellant no. 1 had used the Brand Name 'SEN & PANDIT' printed on the stickers/ labels which were affixed on its products? II. If at all any Brand Name has been used, whether the same was owned by M/s SPPEL, appellant no. 1's sister concern? III. Whether the appellant No. 1 had undertaken manufacturing activities at the Lake View Road premises? IV. Whether the Show Cause Notices dated 06.12.2004 are barred by limitation? Before we delve into the factual matrix of the matter, it would be worthwhile to refer to the definition of Brand Name as given in the relevant SSI Exemption Notifications, which runs as under: " "brand name" or "trade name" shall mean brand name or trade name, whether registered or not, that is to say a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r/ label, we must hold that the words 'SEN & PANDIT' printed thereon do not qualify as Brand Name/ Trade Name. 13. That the appellant No. 1 had never intended to use the disputed expression as a Brand Name is also supported by the fact that it had already applied for registration of Brand Names/Trade Marks like "SPEL", "POWERSYS", "SEN & PANDIT ELECTRONICS PVT. LTD. - SPEL" etc. The said fact had been stated by the appellant No. 1 in its letter dated 06.10.2004, which appears at page 134 of the combined Paper Book. It is seen that the appellants' submissions based on this letter have not been countered. 14. Furthermore, we find that the expression 'SEN & PANDIT' is the first part of the appellant No. 1's full name, which also happens to be a part of the full name of M/s Sen & Pandit Power Electronics Pvt. Ltd. The said expression cannot be held as descriptive enough to indicate a connection in the course of trade between the products of appellant No. 1 and its sister concern, M/s SPPEL. In fact, the said label indicates the actual manufacturer's name, name of the product, model No., voltage capacity etc. The sticker/label produced before us merely creates an impression that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the relevant SSI Exemption notifications is not attracted in the facts and circumstances of the present case. 15. In the impugned Order, the Learned Commissioner has relied on Tarai Food Ltd. v. Commissioner reported in 2006 (198) ELT 323 (S.C.) and Commissioner of Central Excise v. Grasim Industries Ltd. reported in 2005 (183) E.L.T. 123 (S.C.). We are of the opinion that the decision of Grasim Industries Ltd., supra is actually in favour of the appellants. In the said decision, the Hon'ble Supreme Court held, inter alia, held that SSI exemption benefit was available to such parties who did not associate their products with some other person, quite like the present appellant No. 1. Expanding on the meaning of the terms "that is to say" contained in the relevant notification, the Hon'ble Apex Court was pleased to hold that Brand Name/ Trade Name was to be understood in context of the words which followed. Even a signature or an invented word or any writing was sufficient to constitute Brand Name when used in relation to the product for the purpose of indicating a connection between the product in question and the other person. Similarly, we could not read the Tarai Food Ltd. dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es/ Trade Marks has been ignored while passing the impugned Order. The lower authority seems to have been misled while concluding that M/s SPPEL was the owner of Brand Name i.e. 'SEN & PANDIT'. If that be the case then we must hold that the Learned Commissioner's observation is devoid of substance. The allegations in the first Show Cause Notice, as confirmed in the Order-in-Original, fall flat when one bears in mind the correct factual position. It would also necessarily follow that M/s SPPEL could not have been regarded as the owner, legal or otherwise, of the logo/ mark 'SEN & PANDIT'. 18. There is another aspect of the matter which deserves a brief discussion. The Learned DR had argued that M/s SPPEL is the legal owner of the Brand Name since it had applied for registration of the said Brand Name being 'SEN & PANDIT'. This argument, however, does not inspire confidence. It is not a fact that simply by having applied for registration, ownership rights were conferred on the appellant No. 1's sister concern. We had specifically enquired as to whether the registration applications filed by M/s SPPEL, which have been shown as pending, had been subsequently registered by the Trade Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that such technical operations were necessary for making the said semi-finished stabilizers complete and functional. We have previously gone through the statements dated 09.04.2003 and 10.04.2003 of the appellant No. 3. We do not concur with the Department's view that Shri K. K. Biswas had given an impression that the appellant no. 1 used to perform 'manufacturing' activities at the Lake View Road premises. While answering question no. 5 in his statement dated 09.04.2003, Shri K. K. Biswas had clearly stated that only post-sale service, repairing, quality control works etc. were being undertaken at the aforesaid premises. We quote below the relevant parts of the said statement dated 09.04.2003: ".. Q.5:- You have mentioned earlier that the office of M/s Sen & Pandit Electronics Pvt. Ltd. at 16B, Lake View Road, KOL-29 is a service centre and sales office, please define what short of work is done in your service centre and also what facility of servicing/ manufacturing are available in that section of office. Ans: - In the office at 16B, Lake View Rd, Kolkata-29 a portion is separated and marked as Service Centre where some people are used to sit and are engaged in the jo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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