The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the excise duty demand as there was sufficient evidence to establish that the brand name belonged to third person.
The Appellant – M/s Sri Sai Krishna Health Care Products (SSKHCP) is engaged in manufacture of mosquito coils falling under Chapter Sub-heading No.3808.00 of the Central Excise Tariff. Based on investigation conducted by the Anti-Evasion Wing of Hyderabad-I Commissionerate, it was noticed that the Appellants were engaged in manufacture and supply of mosquito coils to one – M/s Sree Ramcides Chemicals Pvt Ltd (SRCPL) and M/s Farmax Health and Food Products Pvt Ltd (Farmax). These mosquito coils were being cleared under the name “STOP” for SRCPL and under the name “TODAY” for Farmax.
It also appeared to the department that the exemption benefit under Notification No.08/2003-CE dt.01.03.2003, which was being claimed by the Appellant, was not correct as they were not meeting the condition No.4 of the said notification.
The condition No.4 of the said notification provided that the exemption contained in the notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person.
The main issue which needs to be decided was whether the Appellants were clearing the goods under the brand name of another person or otherwise. Admittedly, the Appellants were manufacturing mosquito coils, which were being cleared to two parties viz., SRCPL & Farmax, in terms of Agreement entered between the Appellant and SRCPL/Farmax.
A Two-Member Bench comprising Anil Choudhary, Judicial Member and AK Jyotishi, Judicial Member observed that “Thus, in the absence of the Appellant’s providing any evidence that they were the brand name owners, irrespective of the fact that whether it was registered in their name or not and the market’s perception that brand name belonged to somebody else, it is not possible to consider that it did not belong to others. In fact, in this case, sufficient evidence is on record by way of statements and other relied upon documents to the effect that these brand names/trade names were belonging to SRCPL and Farmax.”
“In this case, as rightly observed by the Commissioner (Appeals), there is sufficient evidence to clearly establish that brand name or trade name belonged to other persons viz., SRCPL/Farmax and not to the Appellant. Further, there is nothing on record to establish that the Appellants were perceived to be the brand name owner for “STOP” and “TODAY” in the market. Therefore, the Order of Commissioner (Appeals) is based on correct appreciation of facts and legal provisions and therefore, the same need not be interfered with” the Bench concluded.
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