Metro Industries, Metro Chemical Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....for seeking waiver of payment of duty of rs. 5,56,090/- and penalty of rs. 50,000/-.2. facts of the case are the appellant is engaged in the manufacture of essence of phenyl (tiger brand), white perfumed deodorant (tiger brand) and liquid blue falling under chapter sub heading nos. 3808.90, 3307.49 and 3206.90 the appellant was charged with violation of provisions of section 6 of the central excise act, 1944 read with various rules of the central excise rules. the appellant had claimed the benefit of notification no. i/93 relating to small scale exemption. the adjudicating authority did not grant the exemption on the ground that the assignment of trade mark by metro chemical works (appellant in appeal no. e/1523/2002) to metro industries (appellant in appeal no.e/1522/2002) was not registered with the trade-mark registry. the adjudicating authority notes in his order at page 35 of the paper book that the assessee metro industries used the brand name 'tiger' owned by metro chemical works. it must be stated that kamlabai asrani and the owner of m/s. metro industries hasmukh shah were co-holders of trade mark no. 472246 in class 5 issued on 15^th may 1987. said kamlabai asrani.....

Judgment:

1. Application No. 1389/02. This is an application for seeking waiver of payment of duty of Rs. 5,56,090/- and penalty of Rs. 50,000/-.

2. Facts of the case are the appellant is engaged in the manufacture of Essence of Phenyl (Tiger Brand), white perfumed deodorant (Tiger brand) and liquid Blue falling under Chapter Sub Heading Nos. 3808.90, 3307.49 and 3206.90 the appellant was charged with violation of provisions of Section 6 of the Central Excise Act, 1944 read with various rules of the Central Excise Rules. The appellant had claimed the benefit of Notification No. I/93 relating to small scale exemption. The adjudicating authority did not grant the exemption on the ground that the assignment of trade mark by Metro Chemical Works (Appellant in Appeal No. E/1523/2002) to Metro Industries (Appellant in Appeal No.E/1522/2002) was not registered with the Trade-Mark Registry. The adjudicating authority notes in his order at page 35 of the paper book that the assessee Metro Industries used the brand name 'Tiger' owned by Metro Chemical Works. It must be stated that Kamlabai Asrani and the owner of M/s. Metro Industries Hasmukh Shah were co-holders of trade mark No. 472246 in class 5 issued on 15^th May 1987. Said Kamlabai Asrani assigned the Trade-mark in favour of Metro Industries by an assignment deed dt. 1.4.93. The adjudicating authority imposed penalty of Rs. 20,000/- on Metro Chemical works and Rs. 10,000/- on Hasmukh Shah. On appeal the appellate authority discussing the merits of the case dismissed the Appeals filed before him for non payment of the duty demanded and penalty imposed on three applicants. Hence these three appeals.

3. It has been held in the Commissioner (Appeal's) order that it is not correct to say that the trade mark was registered "jointly" in the name of Kamlabai B. Asrani and Hasmukh A. Shah. But the correct legal position is of the trade mark was registered in the partnership firm M/s. Metro Chemical Works having these two persons as partner to hold it otherwise well negate the provisions of law.

4. Ld. Counsel Shri D.H. Shah appearing for the appellants invited our attention to the Partnership Deed dt. 13.11.1985 wherein Kamlabai B.Asrani and Hasmukh A. Shah became partners of Metro Chemical Works. he also invited our attention to the Affidavit dated 24.3.1998 wherein the said Kamlabai B. Asrani had stated that Metro Chemical Works was being managed and conducted by Hasmukh A. Shah and the brand name Tiger was assigned by said Kamlabai B. Asrani in favour of Hasmukh A. Shah in the year 1993. It is therefore argued that the question of usage of the brand name by Hasmukh A. Shah is not wrong but denial of benefit of Notification No. I/93 is wrong in law. He also cited several decisions of the tribunal covering the disputed issue in favour of the assessees.

6. We have considered the rival submissions. The assignment deed dt.

1.4.93 and the affidavit of Kamlabai B. Asrani clearly states that she had assigned the trade mark 'Tiger' in favour of the appellant. She has also declared in the said affidavit that she does not claim any right, title and interest on the Trade-Mark "Tiger".Veena Engineering Works v. Commissioner of C. Ex. [2000 (122) E.L.T. 417 (Tribunal)]Collector of Central Excise v. Vikshara Trading & Investement Pvt. Ltd. & Dhanvi Trading & Investment Pvt. Ltd. [1996 (16) RLT 548 (CEGAT-C)] [III] Charkha Detergents & Soap Enterprises v. Commr. of C. Ex. New Delhi. [2001 (130) ELT 333 (Tr.Del)]Commissioner of C. Ex. & Cus., Rajkot v. West Coast Diesels Ltd.,Acmevac Pumps & Engineering Pvt. Ltd. v. Commr. of C. Ex. Mumbai - II [2001 (129) E.L.T. 448 (Tri-Mum.)]Bentex Motor Control Industries and Ors. v. Collector of Central Excise New Delhi.Bullworker Interprises v. Commissioner of C.Ex.Mumbai-IV [2002 (143) ELT 588 (Tri. Mumbai)]Primella Sanitary Products Pvt. Ltd. v. Commissioner of C.Ex.

Goa.

8. After perusing the aforesaid decisions, we are of the view that the appellant has made out a strong prima facie case in their favour. We therefore waive predeposit of duty and penalty in Appeal No. E/1522/02 and Waive Penalties in Appeal No. E/1523/02 & No. E/1524/02. The order also imposes penalty on the Proprietory firm and the Proprietor. The Proprietory concern has no separate existence in the eye of law. On this prima facie view, we take up the three appeals for disposal and remand the matter to the appellate authority to deal with the case on merits without insisting for predeposit. The impugned orders are set-aside and the matters remanded to the Commissioner (Appeals). The Commissioner (Appeals) will pass the fresh orders in accordance with law after observing the principles of natural justice.