VARDHAMAN INDUSTRIES AND ORS. Vs. CCE, DELHI

JUDGEMENT

(1.) THE above captioned appeals have been directed against a common order -in -Appeal dated 8.3.2001 vide which the Commissioner (Appeals) has confirmed the duty and penalties on the appellants as detailed therein. The facts are not much in dispute. Appellant No. 1 is engaged in the manufacture of aluminum ladders under the brand name of "SUMER" which belongs to appellant No. 4. One conducting enquiries by the Central Excise Officers, it revealed that this brand name was got registered by appellant No. 4 with Trade Mark authorities in the year 1971 and they had been getting the aluminum ladders manufactured from appellant No. 1 under that brand name, on payment of fabrication charges. Similarly, appellant No. 3 had also been getting the ladders manufactured from appellant No. 1 in that very manner. On completion of enquiry, show cause notice was served through which duty demand of Rs. 14,71,045/ - for the period 1994 -1995 to 28.9.1996 was raised by denying the benefit of exemption under Notification 1/93 -CE, and penalty was proposed to be imposed, also on appellant No. 1 and other appellants. After getting the reply wherein appellant No. 1 denied of having used the brand name of another person i.e. appellant No. 4 and claimed himself to be sole user and owner of the brand name. The other appellants also denied the allegations made against them in the show cause notice. But the adjudicating authority confirmed the duty demand with penalty against appellant No. 1 and also imposed penalties of Rs. 25,000/ - each on other appellants under Rule 209A. That order had been affirmed by the Commissioner (Appeals). The only issue involved in these appeals is as to whether the appellant No. 1 had used the brand name of another person (appellant No. 4) in the manufacture of the goods (aluminum ladders) and is not entitled to the benefit of the exemption Notification X/93 -CE. The learned Counsel has contended that there is no reliable evidence on the record to prove the ownership of brand name "SUMER" being used by appellant No. 1 on the goods, of appellant No. 4. Rather it stands proved that appellant No. 1 is using this brand name since December 1990 without any interruption and had even applied for its registration in their name with Trade Mark authorities. He has also further contended that appellant No. 4 had even relinquished their ownership of the brand name by executing relinquishment deed in 1998 effective from 1991. Therefore, provisions of para 4 of Notification 1/93 are not attracted for denying the benefit of the Notification.

(2.) ON the other hand, the learned JDR has only reiterated the correctness of the impugned order.

(3.) APART from, this appellant No. 4 had executed assignment/relinquishment deed in favour of the appellant No. 1. Though this deed was executed in the year 1998, the same was made effective from 1991. The execution of this deed had not been denied by appellant No. 4. Therefore, this deed became effective from the date mentioned therein. In this context reference may be made to the ratio of law laid down in M/s. Charkha Detergents & Soap Enterprises v. CCE, New Delhi : 2002 (48) RLT 528 and Tainwala Personal Care Products P. Ltd. v. CCE, Surat II, 2002 (52) RLT 991 :, 2002 (104) ECR 419 (T) wherein it has been observed that the effective date of Assignment deed assigning brand name would be the date mentioned therein and not the date of registration. Therefore, it can be safely concluded that appellant No. 4 by virtue of this assignment, became entitled to use the brand name "SUMER" in their own right. In the light of the facts and circumstances discussed above, it is difficult to conclude that the appellant No. 1 had used the brand name of another person so as to deny them the benefit of the small scale exemption Notification 1/93 for the period in dispute. Therefore, the impugned order of the Commissioner (Appeals) is set aside and the appeals are allowed with consequential relief, if any, permissible under the law.