By TIOL News Service

MUMBAI, MAR 17, 2017: THE appellant is engaged in the manufacture of mineral water under the brand name which was initially owned by Harlen of Singapore.

Revenue sought to deny SSI exemption on the ground that the appellants were using brand name of someone else. The demand was confirmed and penalties were imposed.

In the appeal memorandum, it is argued by the appellant that they are manufacturing mineral water holding brand name "Harlen" which was assigned to them by an assignment deed and, therefore, it is their own brand name. It is further argued that the impugned order wrongly assails the said deed on the ground that no period has been specified. It is also argued that the appellant and Indian Beverages Ltd. are not closely related companies but are independent and separate; that in the classification list filed under Rule 173B, they had mentioned about manufacturing "Harlen" brand mineral water and, therefore, suppression cannot be alleged.

The deed of the assignment submitted by the appellant reads as follows:

"WHEREAS the assignee is desirous of acquiring the right, title and interest and to the said trade mark for exclusive use as its plant in Nasik for the production and sale of mineral water under the said trade mark.

AND WHEREAS the assignor has agreed to assign the said trade mark to the assignee for manufacture of mineral water at the Nasik Plant of the assignee,

NOW THIS DEED WITNESSETH that in consideration of the payment of Rs. 9,000/- the assignor hereby assigns and conveys unto the assignee the right, title and interest in and to the said trade mark for use in production of mineral water in the plant of the assignee at Nasik."

After examination of the above deed, the CESTAT observed -

+ It is seen that while the appellants are desirous of acquiring the rights to manufacture and sell the mineral water under the trade mark, what has been assigned by the assignor is only the right to manufacture the mineral water at the Nasik plant of the assignee. It is apparent that the said deed does not assign the right to sell the product under the said brand name . The trademark has no value whatsoever, if one does not have any right to sell the goods. The assignment merely for the purpose of production of goods cannot be treated as sale of brand name in any manner. Thus, it is obvious that the appellants are not the owners of the brand name, but they have merely acquired the right to produce goods under the brand name without any rights to sell the goods under the said brand name.

+ In view of the above, the appellants cannot be said to be the owners of the brand name. The appellants have admittedly declared in their declaration filed under 173B that they are the owners of the brand name. In view of the observations above that turns out to be a false statement. Thus, mis-declaration is apparent on record.

The appeal was dismissed.

(See 2017-TIOL-861-CESTAT-MUM)