Commr. of C. Ex. Vs. Process Technique Electronics - Court Judgment

Excerpt:
1. this appeal is filed by revenue against order-in-appeal no.1238/99-c.e., dated 22-11-1999 passed by commissioner of central excise (appeals), bangalore.2. shri p.m. saleem, ld. sdr appearing for the revenue pleaded that in this case, the respondents are manufacturer of automatic pf control instrument falling under chapter sub-heading 8537.00 of central excise tariff act and are using 'phasitron' as the brand name of the goods. it is contended that 'phasitron' brand name belongs to m/s. sargrove automation ltd., england and accordingly the respondents are not eligible for concessional rate of duty under notification no. 175/86, dated 1-3-1986 as amended or 1/93, dated 28-2-1993 as amended. the commissioner (appeals) has not considered the evidence relied upon by adjudicating authority and came to an erroneous conclusion that provisions of clauses 3 & 4 of notification no. 175/86 does not state that foreign manufacturer is not entitled for the examination as they are not amenable to the jurisdiction of notification no. 175/86 as amended. the decision of tribunal in the case of fosroc chemicals ltd v. cce [1993 (65) e.l.t. 119] has been discussed by the larger bench of tribunal in their final order in the case of namtech systems ltd. v.cce [2000 (115) e.l.t. 238] wherein it was held that benefit of ssi exemption under notification no. 175/86 and notification no. 1/93, dated 1-3-1986 was not available to specified goods with the brand name/trade name of foreign persons and of a non-manufacturing trader.the ratio of this judgment is squarely applicable in this case as the respondents used the brand name 'phasitron' of m/s. sargrove automation ltd., uk by agreement. even though the above firm has gone into voluntary liquidation there appears to be no evidence to prove that the brand name was transferred and owned by the respondents. therefore, the evidence of the commissioner (appeals) that the trade name 'phasitron' belongs to respondents and not only in india but elsewhere also is not correct in the absence of acceptable evidence to the effect. the technical know-how and collaboration agreement between the respondents and m/s. sargrove automation ltd. does not talk about the transfer/ownership of brand name. the statement of the managing director of appellant company recorded on 22-3-1996 clearly mentions that the name of instrument they are manufacturing is 'phasitron' which is registered trade name used by m/s. sargrove automation ltd. which is registered with the trade mark registry, united kingdom in 1980.therefore, he pleaded that the appeal of the revenue may be allowed.3. shri k.s. ravi shankar, ld. advocate appearing for the respondents, drew our attention to para 6(i) of the order of the commissioner wherein it is mentioned that the registration of the brand name by m/s.sargrove automation ltd., uk which was for england only has lapsed since 1991. the collaborator company has also gone into voluntary liquidation during may 1993. he also produced before us the registration certificate of trade mark registry, showing 'phasitron' registration in their name from 4-1-1983. he, therefore, pleaded that since the trade mark 'phasitron' is not being used by anybody else and it is registered only in their name, therefore, they are eligible for ssi exemption. he also relied upon the decision of tribunal in the case of lk pace india ltd. v. c.c.e., baroda [2002 (150) e.l.t. 429] wherein it was held that brand name belonging to a foreign company but registered in india in assessee's own name benefit of notification no.1/93-c.e. not to be denied. he also relied on the decision of the kolkata high court in the case of c.c.e., kolkata v. esbi transmission pvt. ltd. -[1997 (91) e.l.t. 292] wherein it was held that brand name belonging to foreign company but registered in india for others, who acquire exclusive right to use of trade mark in india even though it belonged to a german company who is not eligible to ssi exemption, benefit of exemption cannot be denied in terms of para 7 of notification no. 175/86.4. we have carefully considered the submissions made by both sides. we find that the brand name 'phasitron' belonged to m/s. sargrove automation ltd., england and as per order of the commissioner (appeals), it was not renewed from 1991. under an agreement between m/s. sargrove automation ltd and the respondents, the trade mark 'phasitron' was assigned to them along with technical transfer in 1981 with a life of five years. subsequently, when m/s. sargrove automation ltd., uk has not renewed the brand name and it was lapsed, so from the year 1991 onwards they are the only owner of brand name as it was registered in their name in india in 1983 and it was regularly renewed till date. in the circumstances, since they are the sole owner/user of this brand name, therefore, the order of commissioner (appeals) is correct in law that the respondents are eligible for ssi exemption. we accordingly reject the appeal filed by revenue.

Judgment:
1. This appeal is filed by Revenue against Order-in-Appeal No.1238/99-C.E., dated 22-11-1999 passed by Commissioner of Central Excise (Appeals), Bangalore.

2. Shri P.M. Saleem, ld. SDR appearing for the Revenue pleaded that in this case, the respondents are manufacturer of Automatic PF Control Instrument falling under Chapter sub-heading 8537.00 of Central Excise Tariff Act and are using 'phasitron' as the brand name of the goods. It is contended that 'phasitron' brand name belongs to M/s. Sargrove Automation Ltd., England and accordingly the respondents are not eligible for concessional rate of duty under Notification No. 175/86, dated 1-3-1986 as amended or 1/93, dated 28-2-1993 as amended. The Commissioner (Appeals) has not considered the evidence relied upon by adjudicating authority and came to an erroneous conclusion that provisions of Clauses 3 & 4 of Notification No. 175/86 does not state that foreign manufacturer is not entitled for the examination as they are not amenable to the jurisdiction of Notification No. 175/86 as amended. The decision of Tribunal in the case of Fosroc Chemicals Ltd v. CCE [1993 (65) E.L.T. 119] has been discussed by the Larger Bench of Tribunal in their Final Order in the case of Namtech Systems Ltd. v.CCE [2000 (115) E.L.T. 238] wherein it was held that benefit of SSI exemption under Notification No. 175/86 and Notification No. 1/93, dated 1-3-1986 was not available to specified goods with the brand name/trade name of foreign persons and of a non-manufacturing trader.

The ratio of this judgment is squarely applicable in this case as the respondents used the brand name 'phasitron' of M/s. Sargrove Automation Ltd., UK by agreement. Even though the above firm has gone into voluntary liquidation there appears to be no evidence to prove that the brand name was transferred and owned by the respondents. Therefore, the evidence of the Commissioner (Appeals) that the trade name 'phasitron' belongs to respondents and not only in India but elsewhere also is not correct in the absence of acceptable evidence to the effect. The technical know-how and collaboration agreement between the respondents and M/s. Sargrove Automation Ltd. does not talk about the transfer/ownership of brand name. The statement of the Managing Director of appellant company recorded on 22-3-1996 clearly mentions that the name of instrument they are manufacturing is 'phasitron' which is registered trade name used by M/s. Sargrove Automation Ltd. which is registered with the Trade Mark Registry, United Kingdom in 1980.

Therefore, he pleaded that the appeal of the Revenue may be allowed.

3. Shri K.S. Ravi Shankar, ld. Advocate appearing for the respondents, drew our attention to Para 6(i) of the Order of the Commissioner wherein it is mentioned that the registration of the brand name by M/s.

Sargrove Automation Ltd., UK which was for England only has lapsed since 1991. The collaborator company has also gone into voluntary liquidation during May 1993. He also produced before us the registration certificate of Trade Mark Registry, showing 'phasitron' registration in their name from 4-1-1983. He, therefore, pleaded that since the trade mark 'phasitron' is not being used by anybody else and it is registered only in their name, therefore, they are eligible for SSI exemption. He also relied upon the decision of Tribunal in the case of LK Pace India Ltd. v. C.C.E., Baroda [2002 (150) E.L.T. 429] wherein it was held that brand name belonging to a foreign company but registered in India in assessee's own name benefit of Notification No.1/93-C.E. not to be denied. He also relied on the decision of the Kolkata High Court in the case of C.C.E., Kolkata v. Esbi Transmission Pvt. Ltd. -[1997 (91) E.L.T. 292] wherein it was held that brand name belonging to foreign company but registered in India for others, who acquire exclusive right to use of trade mark in India even though it belonged to a German company who is not eligible to SSI exemption, benefit of exemption cannot be denied in terms of Para 7 of Notification No. 175/86.

4. We have carefully considered the submissions made by both sides. We find that the brand name 'phasitron' belonged to M/s. Sargrove Automation Ltd., England and as per Order of the Commissioner (Appeals), it was not renewed from 1991. Under an agreement between M/s. Sargrove Automation Ltd and the respondents, the trade mark 'phasitron' was assigned to them along with technical transfer in 1981 with a life of five years. Subsequently, when M/s. Sargrove Automation Ltd., UK has not renewed the brand name and it was lapsed, so from the year 1991 onwards they are the only owner of brand name as it was registered in their name in India in 1983 and it was regularly renewed till date. In the circumstances, since they are the sole owner/user of this brand name, therefore, the order of Commissioner (Appeals) is correct in law that the respondents are eligible for SSI exemption. We accordingly reject the appeal filed by Revenue.