By TIOL News Service

MUMBAI, APRIL 28, 2016: THIS is a Revenue appeal.

The respondentwas in the business of manufacturing 'thermoplastic road marking material' and availing concessional rate of duty for the period from July 2000 to June 2003 under the SSI notification(s). They were packing and clearing their products in plastic bags bearing the mark 'CMS' in a distinctively familiar design.

Revenue was of the view that the respondent is not entitled to avail the concessional rate of duty in terms of the cited notification(s) as the design on the plastic bag was the trademark belonging to M/s CMS Computers.

The CE duty demand of Rs.27,77,573/- was confirmed along with interest and penalties by the Additional Commissioner and this order was set aside by the Commissioner (A).

As mentioned, Revenue is in appeal and the AR relied upon the decision in Vee Gee Faucets Pvt Ltd - 2010-TIOL-1572-CESTAT-DEL in support of the Revenue contention.

The respondent submitted that it is the ownership of the brand name that determines eligibility of a manufacturer for the benefit of notification. Inasmuch as the trademark 'CMS' was assigned by M/s CMS Computers Ltd to the respondent by the assignment deed dated 20th April 2000 for a period of five years.

The Bench after noting the above submission observed -

"5. …The first appellate authority has also relied upon the decision of the Tribunal in re Vikshara Trading & Investment Pvt. Ltd cited supra which has been upheld by the Hon'ble Supreme Court in appeal - 2003-TIOL-97-SC-CX. The Tribunal held that when a brand name owned by an entity using that brand name for a particular product is assigned to another entity for temporary ownership, for use in a different product, the exemption extended to small-scale industry units cannot be denied. The decision cited by the Learned Authorised Representative related to usage of the brand name by the assignee on a product similar to that produced by the ineligible assignor. In like manner, the reliance placed upon the decision of the Hon'ble Supreme Court in Commissioner of Central Excise, Bangalore v. Vetcare Organics (P) Ltd. - 2015-TIOL-135-SC-CX does not apply to the facts in the present case as that decision was rendered in the context of a clear finding that mere permission does not suffice to transfer ownership of brand name even temporarily. Here, it is clear that there is an assignment of the brand name of 'CMS' under a deed for a fixed period. It is also clear that the product manufactured by the respondent is in no way connected to the products manufactured by the assignor of the brand name."

Holding that in view of the settled legal position, there is no merit in the submissions of Revenue, the appeal was dismissed.

(See 2016-TIOL-1017-CESTAT-MUM)