Use of Family Name would not Amount to the Use of Brand Name of Third Parties: CESTAT Allows SSI Exemption [Read Order]

In the case of M/s Rastogi Furnishers & Decorators P. Ltd vs Commissioner of Central Excise(CCE), Customs, Excise & Service Tax Appellate Tribunal held that the use of family name would not amount to the use of brand name of third party for disallowing SSI exemption to the assessee.

Assessee Company in the present case engaged in the manufacture of steel and wooden furniture which is being sold without bearing any brand name.

While conducting search in the business premises of the assessee, a furniture valued at Rs. 9,01,150 which was seized by the authority and also demanded excise duty of Rs. 59,17,272 and accordingly penalties were imposed.

In the instant case, the Revenue took a view that the assessee-Appellants manufacture furniture and sold the same under the brand name ”Rastogi‟ which is the brand name of another person, hence the exemption claimed by the assessee would not allowable.

Before the Tribunal, the council for the assessee advocate Manish Agarwal submitted that there are four firms of the family members who are using the name “Rastogi‟, which is the family name and also argued that the said brand name is not registered with anyone, except that it is used by the family members. And the council further argued that sale of the assessee is within the prescribed limit of the SSI Exemption, so the assessee is eligible to get the exemption as Smalle Scale Industries (SSI) unit.

After considering the rival submissions of both the parties the tribunal consists of President Satish Chandra and Technical Member V.Padmanabhan observed that, while perusing the material facts and records it has found that “Rastogi‟ is a family name which is used by the family members in their business established and assessee in the present case is one of the family member. In fact, “Rastogi‟ is not a brand name of any other person and is being used by the family members and it is the family name for which every family member is entitled to use.

The tribunal further observed that the Department to allege that the assessee-Appellants were using the brand name of another person. It can be concluded that the assessee have not used any registered brand name of the third party, hence the assessee entitled for the SSI exemption, as per law.

The bench further relied upon the decision in CCE, Indore vs Kuber Industries, wherein the Tribunal observed that, affixing the family name or brand name in the letter head does not amount to the use of brand name of third parties. “In the instant case, there is no third party who owns the brand name of “Rastogi‟. The Department has neither issued any notice nor examined the firms of family members who are also engaged in the similar line of business. Only the assesseeAppellants have been made target which is not desirable. Thus, the Department has made out a poor case,” the bench said.