Custom, Excise & Service Tax Tribunal
Bonny Baby Care Pvt. Ltd vs Cce, Noida on 5 February, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
COOURT NO. II
Excise Appeal No.E/141/2005
[Arising out of Order-in-Original No. 81-83/Commissioner/2004 dated 30.09.2004 Passed by Commissioner Central Excise, Noida]
Bonny Baby Care Pvt. Ltd.
Appellant
Vs.
CCE, Noida
Respondent
Present for the Appellant : Shri.B.L.Narasimhan, Advocate Present for the Respondent : Shri Sanjay Jain, D.R. Excise Appeal No.E/143/2005
[Arising out of Order-in-Original No. 81-83/Commissioner/2004 dated 30.09.2004 Passed by Commissioner Central Excise, Noida] Baby Care Marketing Co.
Appellant
Vs.
CCE, Noida
Respondent
Present for the Appellant : Shri.B.L.Narasimhan, Advocate
Present for the Respondent : Shri Sanjay Jain, D.R.
Excise Appeal No.E/144/2005
[Arising out of Order-in-Original No. 81-83/Commissioner/2004 dated 30.09.2004 Passed by Commissioner Central Excise, Noida] Subhash Aneja, MD Appellant Vs. CCE, Noida Respondent Present for the Appellant : Shri.B.L.Narasimhan, Advocate Present for the Respondent : Shri Sanjay Jain, D.R. Excise Appeal No.E/972 & 988 of 2012 [Arising out of Order-in-Appeal No. 24-29CE/APPL/NOIDA/12 dated 31.01.2012 Passed by Commissioner Central Excise, (Appeal), Noida] Bonny Baby Care Pvt. Ltd.
Appellant Vs. CCE, Noida Respondent Present for the Appellant : Shri.B.L.Narasimhan, Advocate Present for the Respondent : Shri Sanjay Jain, D.R. Excise Appeal No.E/989/2012 Excise Appeal No. 990/2012
[Arising out of Order-in-Appeal No. 24-29-CE/APPL/NOIDA/12 dated 31.01.2012 Passed by Commissioner Central Excise, (Appeal), Noida] Subhash Aneja, MD Appellant Vs. CCE, Noida Respondent Present for the Appellant : Shri.B.L.Narasimhan, Advocate Present for the Respondent : Shri Sanjay Jain, D.R. Excise Appeal No.E/991/2012 Excise Appeal No.E/992/2012 [Arising out of Order-in-Appeal No. 24-29-CE/APPL/NOIDA/12 dated 31.01.2012 Passed by Commissioner Central Excise, (Appeal), Noida] Baby Care Marketing Co.
Appellant
Vs.
CCE, Noida
Respondent
Present for the Appellant : Shri.B.L.Narasimhan, Advocate
Present for the Respondent : Shri Sanjay Jain, D.R.
Excise Appeal No.E/3044/2005
[Arising out of Order-in-Original No. 77-78/CE/APPL/Noida/05 dated 31.05.2005 Passed by Commissioner (Appeal), Central Excise, Noida] CCE, Noida Appellant Vs. Bonny Products Pvt. Ltd.
Respondent
Present for the Appellant : Shri.B.L.Narasimhan, Advocate
Present for the Respondent : Shri Sanjay Jain, D.R.
Coram: Honble Mr.D.N.Panda, Judicial Member
Honble Mr. Rakesh Kumar, Technical Member
Reserved on: 01.08.2013
Pronounced on: 05.02.2014
ORDER NO.50373-50381/2014
PER: D.N.PANDA
Appeal No. E/141/2005, 143/2005 and 144/2005 is one batch of appeal which covers the period 1.12.1998 to 31.03.2004, arose out of common adjudication. The other batch of appeals No.972/2012, 988/2012 to 992/2012 covers the period April, 2004 to April 2006 arose out of common appeal order.
2. Revenue is in appeal registered as E/3044/2005.
SUBMISSIONS ON BEHALF OF ASSESSEES
3. Ld. Counsel Shri B. L. Narasimhan appearing for assessees submits that there are 3 issues involved in the first batch of appeal registered as appeal Nos. 141/2005, 143/2005 and 144/2005 relating to the period 01.12.1998 to 31.03.2004.
MANUFACTURE NIPPLE
4. The first issue in the first batch of appeals is whether complete feeding bottles cleared, manufacturing only nipple thereof and affixing/assembling thereto other components/accessories bought out from outside or manufactured by others, amounts to manufacture.
5. On behalf of appellant it was submitted that the nipple manufactured by the appellant was exempted goods. Complete feeding bottles assembled making use of the nipples manufactured by the appellant was sold. Such sale would not amount to manufacture following the principles laid down by the Honble High Court of Bombay in the case of Commissioner of Sales Tax v. Trinity Products reported in MANU/MH/0127/1975 : 1975 (35) STC 502 (Bom.). Also he submits that the ratio laid down in Trinitys case was applied by Tribunal in the case Dalmia Industries Ltd. vs. CCE, Jaipur 1999 (112) ELT 305 (Tri) and that was upheld by Honble Apex Court in the case of Commissioner v. Dalmia Industries Ltd. reported in 2005 (184) ELT A.37 (SC) (Sl.No.19 of the compilation). Once trading activity goes out of the scope of adjudication, nearly demand of Rs.20.00 lakhs approximately shall not sustain on this count.
6. Filing a note of argument, appellant drew attention to para (viii) to (x) of the said note to submit that the valuation adopted by the department holding the appellant and the marketing agency were related person is baseless when no depression to the assessable value was found. So also analyzing the definition of manufacture, he says that although the nipple falls under the Chapter 39, that is exempted goods for which the appellant shall not be liable to duty at all. When the appellant traded feeding bottle that was not liable to duty in absence of any tariff entry.
7. It may be stated that the competing entries was not in dispute before learned adjudicating authority nor there was any decision made on such classification issue. He only emphasised heavily on trade mark use by the appellant company in the entire batch of appeals which was the second issue in his adjudication order. Deciding the trade name BONNE, was BELONGING TO OTHERS, learned authority denied benefit of SSI exemption under of Notification No.1/93, 85/2001 & 8/2003.
8. Third issue related to valuation of goods cleared during the impugned period. He submits that, such issue need not be argued if the appellant succeeds on the eligibility to SSI exemption.
SECOND BATCH OF APPEAL
9. So far as the second batch of appeal registered as 972/2012 and 988-992 is concerned, ld. Counsel says that the only primary issue involved therein is whether the appellant was eligible to SSI exemption. The appellant manufactured entire feeding bottle from April 2002. Hence the issue of manufacturing is not involved in this batch of appeal.
BRAND NAME
10. In so far as the use of the brand name is concerned, ld. Counsel says that it was the brand name of the appellant owned on the basis of the Assignment Deed executed in favour of the appellant by virtue of family settlement dated 15th May, 1997 and Deed of Assignment dated 3rd Jan., 1998 which are borne by appeal record at pages 50 59 of E/441/2005. It was further submitted that if the brand name is owned by the appellant by virtue of those documents, the appellant should not be disentitled to SSI exemption.
11. On the point of assignment, he refers to the decisions of various forums in Bentex Motor Control Industries v. CCE, New Delhi reported in 2002 (139) ELT 679 (Tri-Del), M/s.Ritzbury India (P) Ltd. and CCE, Chennai and M/s Ritzbury India (P) Ltd. reported in 2012 (192) ECR 0137 (Tri. Chennai) & CCE, Ahmadabad vs. Vikshara Trading & Invest P. Ltd. reported in 2003 (157) ELT 4 (SC) (Sl.No.12, 27 and 28 of the compilation filed).
12. According to ld. Counsel for appellants, if assignment is not recorded in the record of Registrar of Trade Mark that does not deprive the appellant from SSI exemption following the decision of the Tribunal specifically in Commissioner v. Dalmia Industries Ltd. reported in 2005 (184) ELT A.37 (SC), M/s.Ritzbury India (P) Ltd. and CCE, Chennai and M/s Ritzbury India (P) Ltd. reported in 2012 (192) ECR 0137 (Tri.-Chennai) (Sl.No.19 & 27 of the compilation). So also he relied on the Apex Court decision in CCE, Ahmadabad vs. Vikshara Trading & Invest P. Ltd. reported in 2003 (157) ELT 4 (SC) (Sl.No.28 of the compilation).
13. He further invited attention to the issue of brand name and exemption issue in terms of para 3 & 4 of the note of argument filed. Drawing attention to the date chart filed along with notes of argument, he submitted that the chronology and event of the constitution and re-constitution of the partnership firm and ultimate dissolution thereof ended with the right of assignment of the trade-mark vested with the surviving partners/ successors of the deceased partners. The date chart also shows that Trade Mark was assigned ultimately to this appellant company from December 1997. He negates Revenues contention that trademark authoritys correspondence shall be basis to hold the ownership of the trademark otherwise.
REVENUES SUBMISSIONS MANUFACTURE
14. Revenue on the other hand says that the activity of the appellant is manufacturing because the appellant has not cleared nipple as such but total feeder bottle was cleared with all components attached to that carrying out some process as found by learned adjudicating authority. He submits that the decision cited by ld. Counsel in the Trinity products was in the context of sales tax law, but not in the context of Central Excise Law. Therefore, the activity carried out by the appellant shall bring the appellant to the fold of manufacture read with Chapter 96 of the Tariff entry. The appellant cleared distinct goods with a distinct brand name for which it shall not take benefit of the decisions of the Tribunal having manufactured the goods.
BRAND NAME
16. So far as the brand name is concerned, emphasizing on para 1.1.1, 1.1.2, 1.2.4 and 1.2.7 of the note of argument filed by Revenue and also drawing attention to various finding of the learned adjudicating authority, it was submitted that the appellant not being owner of the brand-name Bonne was not entitled to SSI exemption benefit for which that is rightly denied by adjudicating authority.
17. Heard both sides.
18. Revenue although agreed in the course of hearing that they shall examine the excise records of Appellant to ascertain whether returns were filed by the appellant, nothing was placed before the bench before conclusion of the hearing by Tribunal.
19. Appeals of the assessee in both the batch having leaned on the issue of SSI exemption granted under Notification Nos. 1/93, 85/2001 and 8/2003, as pleaded aforesaid, and that being a common issue, that issue is taken up first in this common order.
20. Revenues primary allegation was that the assessee was not owner of the brand name BONNE and BABBY CARE FROM THE MAKERS OF BONNNE. While the trade mark BONNY was traceable to the use thereof by the Aneja family in their products prior to their family settlement, nothing could be brought out by revenue as to the original owner of the rest of the trade mark BABY CARE FROM THE MAKERS OF BONNE. Therefore that aspect remained undisputed to be belonging to the appellant assessee in this bunch of appeals.
21. To deal with the issue of the brand name BONNY, factual back ground of ownership thereof being necessary, that is discussed in the paragraphs to follow.
22. As per information received by revenue from Trade Mark Registry in terms of letter No. TMR/MCG/Misc./CC/2003/22/2014 dated 04.07.2003 the brand name BONNE was registered with that authority under registration number 220521 on 10.02.1964 and owners thereof were Shri Nand Lal Aneja, Shri Des Raj Aneja, Manohar Lal and Ms. Krishna Rani trading by a firm Bonny Products, 5602, Gandhi Market, Sadar Bazar, Delhi. Shri Nand Lal Aneja, Shri Manohar Lal Aneja, Shri Ramji Das and Shri Des Raj Aneja were all sons of Shri Amir Chand Aneja. They were carrying on business in partnership under the name and style of Bonny Products with effect from 04.12.1963.
23. On expiry of Ramji Das on 16.01.1979, the firm underwent reconstitution inducting his wife Smt. Krishna Rani in to above partnership with effect from 22.01.1979 by a deed of Partnership and the same business under the name and style of Bonny products continued by the reconstituted firm with following partners thereof.
1. Shri Nand Lal Aneja S/o Amir Chand Aneja
2. Shri Manohar Lal Aneja S/o Amir Chand Aneja
3. Smt. Krishna Rani W/o Late Ramji Das (Son of Amir Chand Aneja)
4. Shri Des Raj Aneja S/o Amir Chand Aneja.
24. On expiry of Nand Lal Aneja on 13.05.1981, the firm Bonny Products under went reconstitution inducting wife of deceased by a deed of partnership dated 16.05.1981, with following parters:
1. Shri Sarla Aneja W/o Late Nand Lal Aneja (Son of Amir Chand Aneja)
2. Shri Manohar Lal S/o Amir Chand Aneja
3. Shri Krishna Rani W/o Ramji Das (Son of Amir Chand Aneja)
4. Shri Des Raj Aneja. S/o Amir Chand Aneja
25. On retirement of Shri Manohar Lal and Smt. Krishna Rani with effect from 11.06.1983, in terms of a deed of retirement dated 11.06.1983, a fresh deed of partnership was executed on 12.06.1983 to cary on the business of M/s Bonny Products, between:
1. Shri Des Raj Aneja C/o Amir Chand Aneja
2. Smt. Sarla Aneja W/o Late Nand Lal Aneja
3. Late Nand Lal was son of Amir Chand Aneja
26. The continuing partners Shri Des Raj Aneja and Smt. Sarla Aneja were allowed to use the trade mark BONNE in the State of Punjab, Union Territory of Chandigarh, Jammu & Kashmir, Himachal Pradesh, U.P., Rajasthan, Madhya Pradesh, Orissa, West Bengal, Assam, Nagaland, Mizoram, and Tripura.
27. In terms of deed of retirement, the retiring partners Shri Manohar Lal and Smt. Krishna Rani were allowed to use the trade mark BONNE in the Union Territories of Delhi, Pondicherry and Goa, State of Haryana, Gujarat, Maharashtra, Andhra Pradesh Tamil Nadu, Karnataka and Kerala.
28. In terms of family settlement entered into by Aneja family consisting of Smt. Sarla Aneja W/o late Nand Lal Aneja, Shri Subhash Aneja, S/o Late Nand Lal Aneja and Smt. Sudesh Aneja W/o Shri Des Raj Aneja on 15.05.1997 it was decided in terms of clause 4 thereof that following members of Aneja family shall continue to be owner of the trade mark BONNE:
1. Smt. Sarla Aneja W/o Nand Lal Aneja
2. Shri Des Raj Aneja S/o Amir Chand Aneja
29. Above clause also refers to a family settlement dated 13.06.1983 stating that Shri Manohar Lal Aneja and Smt. Krishna Rani Aneja were already separated and they were also allowed to use the brand name BONNE in the respective territory assigned to them.
30. Above said clause 4 of the deed of family settlement dated 15.05.1997 further states that Smt. Sarla Aneja W/o Late Nand Lal Aneja and Des Raj Aneja, S/o Amir Chand Aneja were entitled to use the trade mark BONNE in any concern of which she/he is the sole proprietor and/or is a partner/is a director and each of them will be entitled to assign the said trade mark to any of the company concern in which she/he holds any interest of shares.
31. In terms of clause 1 of the deed of assignment dated 03.01.1998 (giving effect from 01.12.1997) executed between Smt. Sarla Aneja W/o Late Nand Lal Aneja (Son of Amir Chand Aneja) and M/s Baby care marketing (India) Pvt. Ltd (BBC) incorporated on 08.03.1994 (in which Smt. Sarla Aneja was director and major share holder), she assigned her right and interest in the trade mark BONNE to that company. Name of the company was changed to Bonny Baby Care Pvt. Ltd (BBC) with effect from 21.01.1998. In terms of the clause 4 of the assignment deed, the company was also allowed to apply to Trade Mark Authority for the registration of the trade mark BONNE in its name. Accordingly application was made by that company on 24.04.2003 for registration of the trade mark in its favor.
32. The deed of assignment also stated in its recital that M/s Bonny Products closed its business after family settlement on 15.05.1997 and Smt. Sarla Anneja and Shri Des Raj Aneja who were partners thereof carried on business through companies in which they were directors and majority shareholders.
33. Learned Adjudicating Authority recorded in page 16 of adjudication order that M/s Bonny Products ceased to function with effect from 15.05.1997. But the brand name BONNE continued in record of Trade Mark Registry owned by late Nand Lal Aneja, Shri Des Raj, Manohar Lal and Smt. Krishna Rani W/o Late Ramji Das. M/s Bonny Baby Care (P) Ltd applied for registration of brand name BONNE on 24.04.2003 in its favour while investigation into the affairs of BBC made on 20.03.2003 revealing use of brand name by the company prior to that date.
34. On the aforesaid backdrop of adjudication findings on the use of trade mark and arguments made by both sides it is noticeable that the brand name BONNE was used by the appellant company being an assignee of the right assigned to it by Smt. Sarla Aneja. It is an admitted fact on record that M/s Bonny Products ceased to operate with effect from 15.05.1997 after family settlement dated 15.05.1992 and Smt. Sarla Aneja having right over the trade mark BONNE assigned such right to M/s Baby Care Marketing (India) Pvt. Ltd which was renamed as Bonny Baby Care Pvt. Ltd (BBC) with effect from 21.01.1998 as per fresh certificate of incorporation issued by Registrar of companies.
35. When there was no existence of M/s Bonny Products as on 08.03.1994 i.e. date of incorporation of the company appellant and date of execution of deed of assignment on 03.01.1998, appearance of name of Nand Lal Aneja (expired on 13.05.1981), Shri Manohar Lal Aneja, Shri Ramji Das Aneja (expired on 16.01.1979) and Shri Des Raj Aneja in the records of Trade Mark Authority, has no significance for the reason that two of the partners were deceased and their successors as well as the existing partners Shri Manohar Lal Aneja and successor of Shri Des Raj Aneja agreed to enjoy right over the trade mark in different territories defined by the deed of retirement and deed of family settlement.
36. By virtue of assignment of title over the trade mark by Smt. Sarla Aneja to M/s Bonny Baby Care (P) Ltd (BBC), the later became owner thereof in absence of any evidence to the contrary. Therefore the benefit of SSI exemption to that company is undeniable on the ground of use of others trade mark.
37. The issue of trade mark and availability of the SSI exemption having been decided in the manner aforesaid and in favour of the appellant company, going into other issues framed by the learned adjudicating authority may be redundant exercise for which all the appeals are allowed.
38. Both the parties failed to argue in appeal No. E/3044/2005 for which Registry is directed to list that appeal for hearing and disposal.
[Pronounced in the Court on 05/02/2014] (RAKESH KUMAR) (D.N.PANDA) TECHNICAL MEMBER JUDICIAL MEMBER Anita 1 14 E/141,143 & 144of 2005 & E/972,988,989,990,991 & 992/2012 & E/3044/2005