Case Law Details
Appu Hotels Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The issue is whether the appellant can be denied the benefit of exemption of Notification No.8/2003-CE dated 01.03.2003 on the allegation that the appellant has cleared goods using the brand name of another.
In the present case, the appellants have entered into an agreement with Meridien SA dated 12.4.2000 by which they have acquired the brand name “Le Royal Meridien”. They have been given the exclusive right to use the brand name till the expiry of the agreement. Therefore, it cannot be said that they are using the trademark of another person. This issue was considered by the Hon‟ble Supreme Court in the case of Otto Bilz (India) Pvt. Ltd. (supra), wherein the foreign brand name owner when had assigned the trademark to the Indian company under an agreement with the right to use the trademark exclusively in India, the Hon‟ble Court held that the Indian company is entitled to SSI exemption.
We do not find any grounds to take a different view. Following our decision in the earlier final order supra, we find that the demand cannot sustain. Impugned order is set aside. Appeal is allowed with consequential relief, if any.
FULL TEXT OF THE CESTAT CHENNAI ORDER
Brief facts of the case are that appellants 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 said brand name was owned by “M/s. Star Wood Hotels and Resorts Ltd. (hereinafter referred to as M/s.SHRL). 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. Show cause notice was issued for different periods proposing to deny exemption and demand duty along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalty. Aggrieved by such order, the appellants filed appeal before the Commissioner (Appeals) who upheld the same. Hence this appeal.
2. Ld. Counsel Shri M.N. Bharathi appeared and argued for the appellant. He 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. The words used in the notification is that the goods have to be cleared using the brand name of another. The appellant has not used any brand name on the goods cleared by them. Further, the brand name as per the Notification No.8/2003-CE dated 01.03.2003 means ‘a brand name or a trade name whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specific goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person’.
3. 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 use of the brand name is by express agreement between SHRL and the appellant. Ld. Counsel relied upon the Final Order No.41097-41098/2018 dated 11.04.2018 in their own case wherein the Tribunal has set aside the demand and allowed the appeal.
2. The Ld. A.R Shri Arul C. Durairaj appeared for the department.
3. Heard both sides.
4. The issue is whether the appellant can be denied the benefit of exemption of Notification No.8/2003-CE dated 01.03.2003 on the allegation that the appellant has cleared goods using the brand name of another. The very same issue was considered, analyzed and discussed in the appellant’s own case for a different period wherein the Tribunal held as follows :
“5. The brand name as per Notification No.8/2003-CE dated 01.03.2003 means as under:-
“Brand name” or “trade name” means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specific goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person”
6. In the present case, the appellants have entered into an agreement with Meridien SA dated 12.4.2000 by which they have acquired the brand name “Le Royal Meridien”. They have been given the exclusive right to use the brand name till the expiry of the agreement. Therefore, it cannot be said that they are using the trademark of another person. This issue was considered by the Hon‟ble Supreme Court in the case of Otto Bilz (India) Pvt. Ltd. (supra), wherein the foreign brand name owner when had assigned the trademark to the Indian company under an agreement with the right to use the trademark exclusively in India, the Hon‟ble Court held that the Indian company is entitled to SSI exemption. The relevant portion of the judgment is reproduced as under:-
“As per the Revenue, the respondent is using brand name „BILZa of a foreign company which makes the respondent ineligible to seek exemption under the aforesaid Notification. However, it has come on record that the foreign company, viz., M/s. Otto Bilz Wekzugfabrik GMPH & Co., a German company, has assigned the trade mark „BILZa in favour of the assessee under Agreement dated 18-6-1996 with right to use the said trade mark in India exclusively. Because of the aforesaid assignment, the assessee is using the trade mark „BILZa in its own right as its own trade mark and therefore, it cannot be said that it is using the trade mark of „another persona. We, thus, are in agreement with the view taken by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as „CESTATa) [2015 (180) E.L.T. 61 (Tri. – Bang.)] that the assessee would be entitled to the aforesaid Exemption Notification.
4. It may also be pointed out that show cause notice dated 31-3-1999 which pertained to the period July, 1997, to March, 1998, is held to be time-barred by CESTAT and further holding that the Revenue could not avail the benefit of proviso to Section 11A of the Central Excise Act. Finding of the CESTAT on this issue is also without any blemish.
5. We, thus, do not find any merit in this appeal which is dismissed on both these grounds”.
7. Following the said decision, we are of the considered view that the denial of SSI exemption is without any basis. For the same reason, the penalty imposed on Shri A. Sennnimalai, Managing Director of M/s. Appu Hotels Ltd. is set aside.
8. In the result, the impugned orders are set aside and both the appeals are allowed with consequential relief, if any.
5. We do not find any grounds to take a different view. Following our decision in the earlier final order supra, we find that the demand cannot sustain. Impugned order is set aside. Appeal is allowed with consequential relief, if any.
(Pronounced in court on 15.02.2022)
