Full Judgment
Jepika Chemicals Industries Pvt. Ltd. and that from the beginning i.e.
8-5-1993 he had manufactured Jepika brand oil bound distemper, etc.; that only subsequently after more than five months, in his statement dated 13-3-1996, Shri B.B. Gupta claimed that "JEPIKA" Brand had been sold to him by Sale Deed 10-1-1994 for a consideration of Rs. 21,000/-; that the Additional Commissioner, under Order-in-Original Nos.
132-136/2001, dated 31-1-2001, has confirmed the demand of duty and imposed penalty besides confiscating the seized goods with an option to redeem the same on payment of redemption fine by disallowing the benefit of small scale exemption Notification, the Respondent had not submitted any proof to show that the brand name had been registered/assigned by the Registrar in his name and that the application had been submitted to the Registrar only on 19-4-1996. He also mentioned that the Commissioner (Appeals) under the impugned Order has allowed the benefit of small scale exemption Notification on the ground that sale of brand name had taken place in January, 1994 and substantial benefit should not be denied for minor infractions and the bar of limitation prescribed under Section 41 of the Trade & Merchandise Marks Act, 1958 is not invocable.
3. The learned SDR submitted that if the Sale Deed had been executed in January, 1994, why was this fact not disclosed by Shri B.B. Gupta in his statement dated 5-10-1995; that further he had submitted the application for registration of deed only on 19-4-1996 that is after the search of his factory premises and after more than two years of sale deed said to have been executed; that Sale Deed was not in existence and it has been executed subsequently with an intent to save the respondent from liability to pay Central Excise duty. He, therefore, contended that the Respondent is not eligible for the benefit of small scale exemption Notification and relied upon the decision in the case of Prince Valves Industry v. CCE, Chandigarh - 2000 (121) E.L.T. 100 (T) wherein it has been held by the Tribunal that a brand name registered in the name of another partnership firm which stood dissolved cannot be used by the Appellants. Reliance has also been placed on the decision in the case of Chhaganlal Sharma v. CCE, Indore - 2003 (160) E.L.T. 489 (T) wherein it has been held by the Tribunal that the sale deed executed in 1997 is nothing but a device to evade the payment of Central Excise duty. He also mentioned that the appeal as well as Review petition filed by the assessee have been dismissed by the Supreme Court as reported in 2004 (167) E.L.T. A66 (S.C.) and 2004 (169) E.L.T. A93 (S.C).
4. On the other hand, Shri K.K. Anand, learned Advocate, submitted that the only case of the Revenue is that the Respondent had not become the owner of the brand name as the necessary amendment has not been carried out in the certificate of Trade Mark Registry; that the brand name had been sold to the Respondent by Sale Deed dated 10-1-1994; that a registered trade mark can be assigned by its proprietor for any consideration under Sections 36 and 37 of the Trade & Merchandise Marks Act, 1958 and by the assignment the person whom the trade mark is assigned to become entitled to it as per Section 44(1) of the Act. He relied upon the decision in the case of CCE, Ahmedabad v. Vikshara Trading & Invest P. Ltd. [2003 (157) E.L.T. 4 (S.C.) = 2003 (58) RLT 604 (S.C.)] wherein it has been held by the Apex Court that "the mere fact that the assignment deed was not registered could not alter the position." Reliance has also been placed on the decision in the case of CCE, Calcutta-I v. ESBI Transmission Pvt. Ltd., 1997 (91) E.L.T. 292 (Cal.) where benefit of small scale exemption was extended to the assessee who had acquired exclusive right to use the trade mark of foreign company in India. He finally submitted that admittedly the Respondent had applied for registration of the brand name in the name of the Respondent in May, 1996 and accordingly the benefit of small scale exemption cannot be denied to them from that date.
5. We have considered the submissions of both the sides. The facts which are not disputed are that the brand name "JEPIKA" used by the Respondent initially belonged to person other than the Respondent. The disputed question is when the said brand name was sold to the respondent i.e. in January 1994 as claimed by the Respondent. We observe that when the Central Excise Officers visited the factory premises of the Respondent on 5-10-1995 and recorded the statement of Proprietor Shri Bharat Bhushan Gupta who deposed that the brand name is registered in the name of M/s. Jepika Chemicals Industries P. Ltd. He did not at all mention that the brand name has been sold to him in January, 1994 for a consideration of Rs. 21,000/-. It has also not been claimed before us that the said statement was recorded under any duress or coercion. The Respondent has also not explained as to why the fact of selling the brand name in January, 1994 was not disclosed on 5-10-1995 when the officers visited the factory seized the branded goods and recorded the statement. We also observe that Shri B.B. Gupta has not even intimated the said fact immediately after 5-10-1995. He only mentioned about the assignment when the Officer recorded Shri Gupta's another statement on 13-3-1996.
6. Further the action has been initiated by the Respondent for registration of the brand name only in April, 1996 that is after the issue of show cause notice dated 2-4-1996 for confiscation of the seized goods. All these facts lead to only one reasonable conclusion that no sale deed for sale of brand name was executed in January, 1994.
Thus the benefit of small scale exemption Notification is not available to the Respondents since the excisable goods manufactured and cleared by them were bearing the brand name of another person. However, there is force in the submission of the learned Advocate that the benefit of small scale exemption notification will be available to the goods manufactured by the Respondents at least from the date of their applying for the Registration of brand name in Respondent's name. We observe that nothing has been brought on record about the action taken by the Competent Authority on the said application made by the Respondent. We, therefore, hold that the benefit of small scale exemption Notification is not available to M/s. Jepika Paints up to 18-4-1996. For the subsequent period commencing from 19-4-1996, the matter regarding eligibility to the small scale exemption Notification is remanded to the jurisdictional Adjudicating Authority to decide the matter afresh after hearing the Respondents about the action taken by the Competent Authority on their application for registration of brand name under the Trade Marks Act. The question of imposing penalty is also left open to be decided by the Adjudicating Authority. The confiscation of the seized goods is upheld as the excisable goods were branded goods and not accounted for in the statutory records. The redemption fine is, however, reduced to Rs. 30,000/-. The appeal filed by Revenue and the Cross Objection filed by the Respondents disposed of in the above terms.