TMI Blog2023 (8) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to such name. In the present case, there was a usage of a well known brand name SUNCA by the appellant(s), although it was registered by M/s. Sun Fat (Holding) Co. Ltd., which did not make a difference to the denial of the benefit of exemption to the appellant(s). The observations of this Court in Bhalla Enterprises has been culled out in the form of a test laid down in Stangen Immuno Diagnostics [ 2015 (6) TMI 155 - SUPREME COURT] . A reading of judgement clearly indicates that in order to deny the benefit of exemption under the Notification, it must be established by the Department that (1) the goods in respect of which the exemption is sought use the same or similar brand name; (2) the said brand name is used with an intention of indicating a connection with the Assessees goods and such other person; and (3) use of such a brand name is to indicate such a connection. The appellant(s) in the instant case is manufacturing emergency lamps and, therefore, the use of brand name SUNCA in the instant case is only fortuitous, being no intention on the part of the appellant(s) to use the said brand name to show a connection with M/s. Sun Fat (Holding) Co. Ltd. The sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to exemption under Notification No.8/2002 and, therefore, directed for redoing of the duty payable by the appellant(s)for the goods seized under SANYO brand name. Thereafter, certain investigations were carried out and show cause notice was issued demanding duty on total value realised amounting to Rs.9,22,58,414/- and proposing penal action. Reply was given to the show cause notice. The Commissioner confirmed the duty demand of Rs.49,78,841/- along with interest and imposed penalty of like amount on the appellant(s). A further penalty of Rs.15 lacs was imposed on the proprietor of the firm and Rs.2 lacs on Shri Rakesh Aggarwal, son of the proprietor of the firm. This order was thereafter impugned before CESTAT. During the course of submissions before CESTAT and while hearing the matter finally, the Department contended that the brand name SUNCA, which was also the name of the products of the appellant(s) herein, though may not belong to M/s. Mikura Impex., was registered in the name of M/s. Sun Fat (Holding) Co. Ltd., a manufacturer of re-chargeable lamps and batteries; that the said brand name did not belong to the appellant firm and it belongs to a third party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied thereon in the Second Schedule to the said Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table: Provided that nothing contained in this notification shall apply to a manufacturer who has availed the exemption under notification No. 39/2001-Central Excise, dated the 31st July, 2001, published in the Gazette of India vide number G.S.R. 565 (E), dated the 31st July, 2001, in the same financial year. Table Sl No Value of clearances Rate of duty (1) (2) (3) 1 First clearances upto an aggregate value not exceeding one hundred lakh rupees made on or after the 1st day of April in any financial year. Nil 2. All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods. Nil 2. xxx 3. xxx 4. The exemption contained in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on had come up for consideration before this Court in the case of Commissioner of Central Excise, Delhi vs. ACE Auto Company Limited (2011) 1 SCC 666, wherein this Court considered whether the Assessee therein, being a small scale industrial unit was entitled to the benefit of the exemption granted under the Notification, as it had prefixed the symbol and logo TATA along with its own brand name ACE on cover assembly manufactured for TATA 310 vehicles. In the said case, adverting to Notification No.1 of 1993-CE dated 28.02.1993, which is in pari materia with the Notification under consideration, it was held in paragraph 13 thereof that Clause 4 of the said Notification, read with Explanation IX, clearly debars an Assessee from the benefit of exemption under the said Notification, if he uses another person s brand or trade name with an intention of indicating a connection between the Assessee s goods and such other person and that the object of the exemption Notification is to grant benefits only to those industries, which otherwise do not have the advantage of brand or trade name (vide CCE Vs. Bhalla Enterprises (2005) 8 SCC 308; Nirlex Spares (P) Limited Vs. CCE (2008) 2 SCC 62 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paragraph 17 of the said judgment is of relevance to the case at hand and the same reads as under: These observations bring out two significant aspects namely:- 1) As per the Notification, the assessee would be debarred only if it uses on the goods in respect of which exemption is sought, the same/similar brand name with the intention of indicating a connection with the assessees goods and such other person or uses the name in such a manner that it would indicate such connection. If there is no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, it would be entitled to the benefit of exemption. (2) The assessee would also be entitled to the benefit of exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name. Learned counsel for the appellant(s) submitted that although the proprietor of the appellant(s) had admitted that the appellant was importing moulds from M/s Mikura Impex, it was nevertheless evident that the brand name SUNCA did not belong to M/s Mikura Impex and such a brand name was being used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Authorities that there was no intention to disclose any business connection or that the user of the brand name was entirely fortuitous and on a fair appraisal of the marks if there was no such connection, the small scale industry will be entitled to the benefit of exemption. The observations of this Court in Bhalla Enterprises (supra) has been culled out in the form of a test laid down in Stangen Immuno Diagnostics (supra). A reading of paragraph 17 extracted above clearly indicates that in order to deny the benefit of exemption under the Notification, it must be established by the Department that (1) the goods in respect of which the exemption is sought use the same or similar brand name; (2) the said brand name is used with an intention of indicating a connection with the Assessees goods and such other person; and (3) use of such a brand name is to indicate such a connection. It has also been noted that if there was no such intention or that the use of the brand name was entirely co-incidental or fortuitous and on a fair appraisal of marks no connection could be established, then the Assessee would be entitled to the benefit of exemption. On an application of the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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