SSI Exemption available If Assessee using Brand Name of Another person by way of Assignment Deed: CESTAT [Read Order]

While hearing the case between M/s. Kusum Industries and Commissioner of Central Excise & ST, Customs Excise and Service Tax Appellate Tribunal (CESTAT) recently held that SSI exemption under the Excise law can be granted if assessee is using the brand name of another person by way of assignment deed.

Assessee Company in the instant case engaged in the business of manufacturing of water treatment and fertilizer quality improvement chemicals and availing the benefit as a SSI unit. There was another unit in the name of M/s. Neelam Aqua and Specialty Chemicals Private Limited and the unit are manufacturing the same product under the brand name Neelco, Neelcoat, Flocsep, Flocculent and these brands were not registered.

During the year the unit of the assessee was visited by the Central Excise officers and it was found that some finished goods were lying there of brand name NASCPL of another person. And the assessee has explained that due to shortage of space, the said quantity was kept there.

However the said goods were seized by the authority and held that the assessee is using the brand name of another person, therefore, they are not entitled to avail benefit of SSI exemption.

Before the Tribunal, counsel for the assessee, advocate Bipin Garg submitted that for an abundant portion, assignment deed was written by the director of the aforementioned unit authorizing the assessee to use the brand name and also placed the assignment deed before the tribunal as evident. He further argued that the assessee never used the brand name of NASCPL and there is no evidence to that effect. The appellant has not cleared any goods under the brand name of NASCPL. It is only in the purchase order the name of the product is mentioned and the same would not establish that the assessee has used the brand name of another person.

By giving careful consideration of the submissions made by both sides, the Tribunal comprising of Judicial Member Ashok Jindal and Technical Member B. Ravichandran observed that during the course of investigation certain goods were found having the brand name of NASCPL from the assessee’s unit, in such circumstances the assessee cannot absolve their liability of using the brand name of another person, therefore, using the brand name of another person on the said goods found in their factory.

The Tribunal further observed that while analyzing the assignment deed submitted by the assessee it has found that as per the deed the assessee was entitled to use the said brand name. “In that circumstance, it cannot be said that appellant is using the brand name of another person. Hence it can be concluded that as the assessee is using the brand name of another person but it was by way of assignment deed. In those circumstances, the assessee is not using the brand name of another person but they are using their own brand name as assigned to them. In that circumstance, the benefit of SSI exemption cannot be denied. Hence the benefit of SSI unit would be allowable to the assessee even though the assessee is using the brand name of another person by way of assignment deed,” the bench said.