SSI Benefit cannot be denied since Manufacturer has Right to Use Brand Name of Another and Cleared Goods: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has held that the SSI Benefit cannot be denied to a manufacturer for clearing the goods using another brand name by considering the fact that such right to use of brand name was already granted to them under an agreement.

The appellants, Appu Hotels Ltd, are engaged in manufacture of cakes, cookies falling under Chapter Heading 19059010 of the First Schedule to the CETA, 1985. On verification of records of the appellants by the Preventive Unit, it was noticed that they were using the brand name ‘Le Royal Meridien’ and were clearing cakes, cookies and pastries without payment of duty by claiming the exemption under Notification No.8/2003-CE dated 01.03.2003.

The Department was of the opinion that the appellants having used the brand name of another person, they are not eligible for SSI exemption in terms of para-4 of the said notification.

The counsel for the appellant, Mr. M.N. Bharathi submitted that the allegation of the department is that appellant has used the brand name of another for clearance of their goods in the nature of cakes, cookies and pastries. It was contended that the appellant has entered into an agreement with M/s.Le Royal Meridien” and ‘Meridien SA’ dated 12.04.2000. By such agreement, the appellant has been licensed to use the brand name of ‘Le Royal Meridien’. Since the appellant is legally allowed to use the brand name, it cannot be said that the appellant is using the brand name of another person.

The bench comprising Ms. Sulekha Beevi (JM) and Mr. P Anjani Kumar (TM) found that a similar issue was discussed in the appellant’s own case for a different period wherein the Tribunal held that the denial of SSI exemption is without any basis. Following the Tribunal order, the bench allowed the plea of the appellants.