Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Jain Pvc Products Pvt. Ltd., Now ... on 13 June, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/3414 & 3415/04 (Arising out of Order-in-Appeal No. IND-I/158 & 159/2004 dated 26.3.2014 passed by the Commissioner of Customs & Central Excise (Appeals), Indore-I). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Central Excise, Indore-I Appellant (in both Appeals) Vs.
M/s Jain PVC Products Pvt. Ltd., now known as M/s Gaauri Plasticulture Pvt. Ltd.
Shri Sanjay Bhandari Respondent (in Appeal No. E/3414/04) Respondent (in Appeal No. E/3415/04) Appearance:
Shri V.K. Agarwal, Addl. Commissioner (AR) for Appellant Shri M.H. Patil, Advocate for Respondent CORAM:
SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 13.06.2014 Date of Decision: 13.06.2014 ORDER NO.
Per: Anil Choudhary The Revenue is in appeal against a common Order-in-Appeal No. IND-I/158 & 159/2004 dated 26.3.2014 passed by the Commissioner of Customs & Central Excise (Appeals), Indore-I, wherein the learned Commissioner (Appeals) was pleased to hold that the assessee is entitled to SSI exemption under Notification No. 1/03-CE reversing the Order-in-Original.
2. The brief facts of the case are that the respondent M/s Jain PVC Products Pvt. Ltd. (JPPL in short), Sendhwa are manufacturers of PVC pipes and fittings under Heading No. 39.17 and the other respondent is Mr. Sanjay Bhandari, Director of JPPL. The Revenue investigated the matter as to use of brand name of another by JPPL and thereby availing wrong benefit of concessional rate of excise duty under Notification No. 1/93-CE. Accordingly, the officers of DG (Anti Evasion) inspected the premises of one Jain Agency on 28.1.1999 dealing in PVC pipes and fittings bearing brand name JAIN PIPE and also recorded statement of Mr. Ashok Jain, Incharge of Jain Agency under Section 14 of the Central Excise Act, 1944. Mr. Ashok Jain stated that the Jain Agency has been dealing in Jain Pipes since 1981 and till 1987, they had purchased pipes from the Jalgaon unit. After the commencement of manufacturing of PVC pipes at Sendhwa unit, they started purchasing pipes from the Indore depot. Delivery challan and bills issued either by JPPL or Jain Plastic and Chemical Ltd. (JPCL in short) having its work at Sendhwa, accompanied the goods. It was further stated that Jain Agencies were dealing in Jain pipes and branded PVC pipes. It was further stated that price of the pipes of both the companies were same and pipes of both the units were kept together as it was both bear the same brand name JAIN PIPE. He further stated, on being subsequently asked, that they were able to supply pipes of a particular company, in case customer so demanded. He stated that the customers demand for Jain pipes generally. Mr. Ashok Jain was shown delivery challan no. 498 issued by JPCL and delivery challan no. 2313 of JPPL, both showing clearance of pipes of various sizes, which bore the same brand name printed on the right hand top most corner of challans and the symbol of Jain Group of Companies printed at left hand top most corner of the challan. In reply, Mr. Ashok Jain stated the same brand name and the house symbol were invariably printed on all the pipes manufactured by both the firms.
2.1 Thereafter officer of DGAE visited godown of Jain Irrigation System Ltd. (JISL in short) and JPPL both located in the same premises i.e. 34/4, Piplia Rao, Indore. The statement of Mr. Jagganth Kanungo, Godown Incharge was recorded, wherein he inter alia stated that he had been working with the Jain Group since 1987. Part of his salary was paid by JPPL and partly by JPCL. Presently, M/s Gauri Plasticulture Pvt. Ltd. (formerly JPPL) was paying him salary. He further stated that in the godown, PVC pipes were received from all the three factories, i.e. JPPL Sendhwa, JPCL Sendhwa and JISL Jalgaon, and all of them bore the same brand name JAIN PIPE and mono of the company. He also explained the markings and the monogram printed on pipes branded as JPPL - JAIN PIPE, JPCL - JAIN PIPE and JISL - JAIN PIPE. The pipes received from all the three factories were kept together according to size. However, the stock ledger, delivery challan and inward book etc. were maintained factory-wise. With regard to delivery of the goods to the various dealers, it was stated that the same was done as per direction from their Indore office and proper entries were made in Books of Account of the particular company, the goods of which were dispatched.
2.2 It is further observed in the para -6 of the Order-in-Original that JPPL is a member of Jain Group of Companies and it used the brand name JAIN PIPE as well as mono of Jain Group of Companies on the PVC pipes and fittings manufactured by it. On scrutiny of the documents of respondent JPPL, it was seen that the company was incorporated in the year 1986 and in November, 1998 was renamed as Gauri Platiculture Pvt. Ltd. JPCL is another member of Jain Group of Companies, comprising of the companies like M/s Jain Kemira Fertilizers Pvt. Ltd., M/s Jain Rahen Biotech Ltd., M/s Jain Irrigation System Ltd. etc. It was also noticed that subsequently, JPCL, JKFL and JRBL were amalgamated with JISL. Scrutiny of invoice and delivery challan of both the companies, JPPL and JPCL revealed that both were having a brand name and house symbol of the Jain group of companies on the delivery challan and invoices. It was further revealed that the three companies, JPPL, JPCL and JISL has engaged one M/s Swift Advertisement Pvt. Ltd. for issuing common advertisement on behalf of all the three companies and the three companies shared the advertisement expenditure proportionately.
2.3 The statement of Shri Sanjay Bhandari, Director of M/s JPPL was recorded on 7.4.1999, in which he stated that the goods of JPPL, JPCL and JISL were received from the factory in a common godown, but separate records were maintained. He further stated that the pipes and fittings sold in the market bore (a) name of the company, which had manufactured, (b) ISI marks, (c) license number of the company, (d) batch no. and (e) JPPL JAIN PIPE, or JPCL JAIN PIPE, or JISL JAIN PIPE, which indicate the distinct manufacturer of the pipe. He admitted that the pipe and fittings manufactured by both JPPL, JISL bore the brand name JPPL JAIN PIPE, and JISL JAIN PIPE respectively printed on the pipes and fittings. On specific query with regard to the brand name of the product of company, he admitted that product in the market was known as JAIN PIPE. It was further stated by Mr. Bhandari that the common advertisement mentioned JAIN PIPE and the product in the market was known as JAIN PIPE. When specifically asked, who had first used the brand name JAIN PIPE, Mr. Bhandari stated that respondent -JPPL have been using the said brand name, which was unregistered, since 1987.
2.4 Accordingly, the Revenue was of the view that the respondent company is using the brand name of another i.e. JAIN PIPE and accordingly, they have violated the conditions of the Notification No. 1/93-CE. Therefore, a show-cause notice dated 16.3.2000 was issued to the respondent company to show cause as to why not excise duty amounting to Rs.8,45,483/- short paid by them for the extended period April, 1996 to October, 1998 should not be recovered after denying the benefit of concessional rate of duty under Notification No. 1/93-CE and further required to show cause as to why not penalty be imposed under Rule 9(2), 52A, 173Q and Section 11AC of the Act. Further proposal to confiscate the land, building, plant and machinery used in connection with manufacture, production , storage and removal or disposal of such PVC pipes in contravention of the said notification. The respondent Director Mr. Bhandari was also required to show cause as to why not penalty be imposed under Rule 209A of the Central Excise Rules.
3. The respondents contested the show-cause notice stating that in the sales godown, PVC pipes and fittings were received of JPPL, Sendhwa; JPCL, Sendhwa and JISL, Jalgaon and all with the same brand name JAIN PIPE and logo of Jain Group. All the pipes received from three units were kept together without any company-wise demarcation. It was further stated that JPCL was merged with the JISL in 1993. JAIN PIPE brand name is not a registered brand name of the any company so far. Admittedly, the pipes of the respondent company bore the brand name JAIN PIPE- JPPL. Similarly, the pipes manufactured by both the companies were kept in a common godown indicating the name and address of these manufacturers. The words JAIN PIPE were used by them is not a brand name of another person, but it was their own brand name. JAIN PIPE cannot be termed as the brand name. Jain is a group and surname of many persons. The Directors of the companies are Jain and hence, they used the words JAIN PIPE. They also embossed their companies name on the pipe to distinguish that the same were manufactured by the particular manufacturer company/unit. Hence, JAIN PIPE cannot be treated as brand name of JPCL or JISL. The logo of Jain group is a house mark and distinctly different from the trade mark. Reliance was placed on the ruling of the Apex Court in the case of Astra Pharmaceuticals Pvt. Ltd. Vs. CCE, Chandigarh 1995 (75) ELT 214 (SC). On the issue of suppression of facts, it was stated that they are registered with Central Excise department and paying concessional rate of duty also. During the dispute period, they had submitted copy of invoice to the departmental authority regularly. Their invoice always used Jain Pipe on the face of the invoice. Therefore, it cannot be said that they have kept back any information from the department. Therefore, as per the respondents, the demand notice is hit by limitation and under the circumstances, none of the penal provisions were attracted. Further, there was no case of any contumacious conduct nor any clandestine removal or manufacture etc. were found and accordingly, confiscation provisions is not attracted. Similar reply was also filed by the respondent Director.
3.1 The show-cause notice was adjudicated by the Joint Commissioner confirming the proposed demand denying benefit of concessional rate under Notification No. 1/93-CE and further penalty was imposed of equal amount under Section 11AC along with further penalty of Rs.2 lakhs under Rule 173Q of Central Excise Rules. Penalty of Rs.50,000/- was imposed under Rule 209A of the Central Excise Rules on respondent Director.
3.2 Being aggrieved, the respondents preferred appeal before the Commissioner (Appeals) on the ground that the adjudicating authority have erred in ignoring that the demand is prima facie hit by limitation under Section 11A as period involved is April, 1996 to October, 1998 and show-cause notice has been issued on 16.6.2000. Without any basis, the marking JAIN PIPE has been wrongly held to be of some other company, which the adjudicating authority has failed to identify. From the copy of invoice furnished dt. 30.11.1987 by the assessee with a view to establish that the invoice contains logo of Jain group and marking JAIN PIPE from 1987. These were furnished along with returns and no case of mis-statement is made out. The adjudicating authority has erred in holding that logo and marking belong to JPCL, Sendhwa, which is not the legal position. Jain group is a house mark of various Jain groups of companies such as JPPL, JPCL, JISL etc. It was not a trade mark for PVC pipes and as regards the JAIN PIPE, it was not a mark of any other companies and that it indicated that the pipe was made by Jains. It was further contended that the Director of the respondent company belong to Jain community and to attract the mischief of the para 4 of the said notification, it is necessary that the alleged mark should be a mark which belongs to some other company and not the assessee. As the alleged mark does not belong to any company in particular, nor there is any evidence in support of the Revenues contention on the record. The respondents also rely upon the ruling of the apex Court, namely: -
(i) Tamilnau Housing Board Vs. Collector 1994 (74) ELT (SC)
(ii) Pushpam Pharmaceuticals Co. Vs. Collector 1995 (78) ELT 401 (SC)
(iii) Cosmic Dyechme Vs. CCE 1995 (75) ELT 721 (SC).
Further, ruling relied upon by the adjudicating authority in the case Theo Pharma Vs. CCE 1992 (60) ELT 395 (Tri) was distinguishable as in that case the manufacturer was using on the label of medicines manufactured by it, its own mark as well the mark of the buyer and the entire goods were sold by the manufacturer to the same buyer, who was marketing them. Such are not the facts obtaining in their case. The learned Commissioner (Appeals) set aside the Order-in-Original and allowed the appeal in favour of the respondents with consequential relief, recording the following findings: -
6. The appeals are being taken up for final disposal after dispensing with the pre-deposit of penalty. I find that the issue involved, in short, is the denial of benefit of SSI exemption to the appellant No.1 for non-satisfaction of the condition No. 4 in Notification No. 1/93-CE dated 28.2.1993. on a careful consideration of the matter, I find that the exemption has been denied on account of sue of another persons brand name. However, I am of the view that the words Jain Pipe cannot be called as brand name since the word Jain is a common word and its use by appellant no. 1 cannot be construed as use of brand name and that too of another person i.e. M/s JPCL. Though JPCL also used the words Jain Pipe in their products even prior to JPPL this would not debar JPPL to use the same as the words used are not registered or known in the trade as belonging to JPCL only. Moreover, the use of the Logo of Jain Group of companies in the invoices and other documents cannot be a ground for deciding the eligibility of SSI exemption. In my view, the Logo cannot be called as brand name but it may be a House Mark for Jain Group of companies as the Logo caries the word J and the words Group/Jalgaon. Even otherwise, as the Logo was not used on the pipes manufactured, it has to be held that the PVC pipes manufactured by JPPL were not bearing any brand name or trade name of another person. Accordingly, the denial of SSI exemption in this case is not warranted and hence the demand confirmed in the impugned order is not sustainable and accordingly, I set aside the same. Since the demand does not survive, the question of imposition of penalties, therefore, does not arise. Interest is also therefore, not leviable. The penalty on Appellant No. 2 also does not survive in the light of the above.
7. Accordingly, the impugned order is set aside and the appeals filed by the appellants are allowed with consequential relief, if any, as per law.
4. Being aggrieved, the Revenue has preferred appeal before this Tribunal on the ground among others that the learned Commissioner (Appeals) has erred in holding that the use of the word Jain Pipe cannot be called as brand name since the work Jain is common word cannot be construed as use of brand name and that too of another person i.e. JPCL. Though JPCL also used the words in their products even prior to JPPL, this would not debar JPPL to use the same, as the words used are not registered or known in the trade as belonging to JPCL only. This finding of the Commissioner (Appeals) is not correct on the ground that explanation VIII to the said Notification provides Brand name or Trade name shall mean a brand or 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 specified 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. As the said definition is very vide, even name of a person who markets the goods, if used on product, may attract provisions as such name or mark indicates connection with the person using it. In view of the admitted fact that mono JAIN PIPE was embossed on the goods and that such mono was also printed on the commercial and excise invoices, hence once the brand name of another appeared on the invoices of the goods, then such use of brand name definitely indicates the connection between the said goods and other person using the said brand name. The finding of the Commissioner (Appeals) that Jain is a common word cannot be construed as brand name is incorrect. Reliance is placed on the ruling of the Apex Court in the case of Bombay Oil Industries Ltd. Vs. Collector 1997 (91) ELT 538 (SC) and Hemraj Gordhandas 1978 (2) ELT J350 (SC).
4.1 It is further contended that when the respondent company started using brand name in question, the same was already in currency and in fact was continued to be used by another company i.e. JPCL much earlier to 1987 by the respondent assessee. Further, the statement of the Director of JPPL also indicated that JAIN PIPE and its logo was in fact established in the market much before JPPL started manufacturing. It is further admitted by the respondent Director that other companies of Jain Group were also eligible to use the said brand name, which is also corroborated with the common advertisement put by the company and sharing of the cost of the same. The use of the word JAIN PIPE and the logo of the Jain Groups of companies shows a connection between the branded goods and in trade, the goods are marketed in the name of JAIN PIPES. Accordingly, the Revenue prays to set aside the order of the Commissioner (Appeals) and restore the Order-in-Original.
5. The learned Counsel for the respondents, Mr. M.H. Patil, states that the Revenue had not been able to establish with certainty that the logo of Jain groups, word JAIN PIPE on the product belongs to a particular manufacture company. It is further contended that in absence of identification any particular and/or claim of any other manufacturer with certainty that the brand name belongs to them, the benefit of concessional rate of duty under the said notification cannot be denied. It is further contended by the learned Counsel that although JPCL have claimed that they had started to use the logo and the words JAIN PIPE prior to the respondent JPPL, but they have not claimed the exclusive rights of the said brand nor in any way stated that JPPL was not entitled to use of the said mark/brand on its product. It is further contended vehemently that whole business plan and use of the brand name was in the knowledge and information of the Revenue throughout which is evident on the face of the record and accordingly, the show-cause notice is ab initio void. There is no allegation of suppression of information or contumacious conduct in the show-cause notice nor there is any categorical finding of the same. The learned Counsel further relies on the ruling of this Tribunal in the case of Minimax Industries 2010 (261) ELT 535 (Tri-Del), wherein the assessee had affixed a logo Minimax which was used and belonged to one M/s Minimax Engineering Industries (MEI) and this fact was stated by the partner of Minimax Industries and confirmed by the proprietor of MEI. In the circumstances, finding was recorded that as per findings on record, it does not reveal that the revenue has been able to establish that the logo Minimax had acquired Trade name or brand of M/s MEI in relation to the machinery manufactured by them. Accordingly, SSI exemption was held to be admissible under Notification No. 1/93 read with 8/93. The said ruling was challenged by the Revenue before the Hon'ble Delhi High Court and the Hon'ble High Court observing that the partnership firm and the proprietorship firm both was run by family members and both have been using the Trade mark for last several years, though, the use by MEI may be prior in point of time, MEI has not got brand name/logo Minimax registered either under the Registration Act or under the Trade Mark Act or any other Act. Minimax has not acquired any such reputation that it can be associated with MEI. Minimax belongs to both the entities namely partnership firm as well as MEI (proprietor firm) and hence, there is no violation of Condition No. IV of Notification No. 1/93-CE, thereby upholding the order of the Tribunal.
5.1 The learned Counsel further relies on the ruling of this Tribunal in the case of Elex Knitting Machinery Co. Vs. Commissioner of Central Excise, Chandigarh-I 2003 (158) ELT 499 (Tri-Del), wherein allegation of use of brand name of another was raised solely on the basis of uncorroborated retracted confessional statement of proprietor. There being no material to suggest that certificates of buyers stating that goods in question did not bear alleged brand name, brought on record by appellants, were fictitious, benefit of Notification No. 1/93-CE was held admissible. Here also it was found that the brand name user being co-owner in the other firm using the brand name from prior point in time, the benefit of Notification was not deniable. Against the said order of the Tribunal, the Revenue had preferred appeal before the Apex Court and the same was dismissed upholding the order of the Tribunal and observing since there was a common ownership of brand name, it cannot be stated that it was owned by another person.
5.2 The learned Counsel also relied upon the ruling in the case of Commissioner of Central Excise Vs. Jain Spices & Agro Products 2011 (273) ELT 135 (Tri-Mum), wherein one of us, learned Member (Technical) was also the Member, wherein under the facts that Jain Spices & Agro Products were manufacturer of spices and pickles and the partners were both Jain started manufacture of spices and pickles from February, 1998 and marketed their goods in the brand name Ravi Masale. The Revenue was of the view that the brand Ravi masale belonged one Shri Phulchand Jain, proprietor of Jain Gruh Udyog and, therefore, the assessee had manufactured the excisable goods bearing the brand name of another, hence, not eligible for SSI exemption - for concessional rate. This Tribunal held it is the case of joint ownership brand Ravi Masale by the family members and each of the family member could use the brand name on the products manufactured by them and, accordingly, dismissed the appeal of the Revenue, holding that the assessee is entitled to SSI exemption.
5. Having considered the rival contentions, we hold that the logo of Jain Group and the words Jain Pipe do not belong to any particular company or manufacturer. Further, the respondents have used the words JAIN PIPE JPPL, which identifies the goods with them only in particular. There is no categorical finding nor claim by any other manufacture as to ownership of JAIN PIPE, brand name. We further hold that under the facts and circumstances, there being regular disclosures to the Revenue by the appellant, no case of suppression of facts or contumacious conduct is made out. Hence, extended period of limitation is not attracted.
7. Thus, the appeals of Revenue are dismissed. The respondents will be entitled to consequential benefits.
(Pronounced in Court)
(P.R. Chandrasekharan) (Anil Choudhary)
Member (Technical) Member (Judicial)
Sinha
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