M/S Universal Detergents (P) Ltd vs Cce, Kanpur

[Arising out of the Order-in-Appeal No. 357/CE/APPL/KNP/2005 dated 16/12/2005 passed by The Commissioner (Appeals), Central Excise, Kanpur.]

For Approval and signature :

Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

1. Whether Press Reporters may be allowed to see :

the Order for publication as per Rule 27 of the

CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of :

the CESTAT (Procedure) Rules, 1982 for

publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair :

copy of the order?

4. Whether order is to be circulated to the :

Department Authorities?

M/s Universal Detergents (P) Ltd. Appellant

Versus

CCE, Kanpur Respondent

Appearance

Shri Ankit Vishnoi, Advocate  for the Appellant.

Shri Ranjan Khanna, Authorized Representative (DR)  for the Respondent.

CORAM : Honble Shri Rakesh Kumar, Member (Technical)

Honble Shri S.K. Mohanty, Member (Judicial)

Final Order No. 50443/2015 Dated : 11/02/2015

Per. Rakesh Kumar :-

The appellant are manufacturers of detergent. The period of dispute in this case is from January to March, 1994 and October to December 1994. The appellant during the period of dispute were availing SSI exemption and were using among other brand names, the brand name Blue Dot on their goods. The Department seeks to deny the SSI exemption on the goods affixed with the brand name Blue Dot on the ground that this brand name belongs to another person M/s Standard Sulphonators (P) Ltd., Kanpur. It is on this basis that the Assistant Commissioner vide order-in-original dated 12/5/98 confirmed the duty demand of Rs. 4,40,138/- against the appellant. On appeal being filed to Commissioner (Appeals) against this order, the Commissioner (Appeals) vide order-in-appeal dated 16/12/05 dismissed the appeal. Against this order of the Commissioner (Appeals), this appeal has been filed.

2. Heard both the sides.

3. Shri Ankit Vishnoi, Advocate, the learned Counsel for the appellant, pleaded that the brand name Blue Dot, alongwith the other brand name Blue, Blue Spot and Blue lines belong to the appellant, that the Departments allegation is that the brand name Blue Dot is owned by M/s Standard Sulphonators (P) Ltd., Kanpur, but in this regard, no evidence has been produced by the Department, that on 01/4/92, the appellant by a Deed of Assignment had assigned the brand name Blue Dot to M/s Standard Sulphonators (P) Ltd. for a consideration of Rs. 50,000/-, but on the same day, due to some dispute, this Assignment Deed was cancelled, that in view of this, the appellant still remain the owner of the brand name Blue Dot, that if the Department alleges that the brand name Blue Dot is owned by M/s Standard Sulphonators (P) Ltd., the burden of proof in this regard is on the Department, but no such evidence has been produced, that earlier, the Joint Commissioner vide order-in-original dated 31/8/01 had confirmed the duty demand of Rs. 9,12,515/- for the period from July 1994 to September 1994 and from October 1994 to December 1994 and the duty demand of Rs. 3,78,241/- pertains to October 1994 to December 1994 period, that same demand is also included in the order-in-original dated 12/5/98 passed by the Assistant Commissioner which is the subject matter of this dispute, that against the Joint Commissioners order dated 31/8/01, the appellant had filed an appeal to Commissioner (Appeals) and the Commissioner (Appeals) vide order-in-original dated 28/6/04 had set aside the Joint Commissioners order holding that the appellant are eligible for SSI benefit in respect of the Blue Dot Detergent Powder as M/s Standard Sulphonators (P) Ltd. who are alleged to be the owner of the brand name have not claimed the ownership of the brand name and the benefit of doubt has been given to the appellant, that no appeal has been filed by the Department against this order of the Commissioner (Appeals) and that in view of this, the impugned order is not correct.

4. Shri Ranjan Khanna, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) in the impugned order and pleaded that the Deed of Assignment dated 01/04/92 clearly mentions that by this Assignment Deed, the appellant had assigned this brand name and transferred it to M/s Standard Sulphonators (P) Ltd. and, therefore, w.e.f. 01/4/92 it is M/s Standard Sulphonators (P) Ltd. who were owner of the brand, that though there is an another agreement bearing the same date  01/4/92, which mentions that the Assignment Deed of 01/4/92 between the appellant and M/s Standard Sulphonators (P) Ltd. has been cancelled on account of some dispute between them, this cancellation deed is not notarised and, hence, no cognizance can be taken of the same, and that the cancellation agreement has not been produced before original Adjudicating Authority or before the 1st Appellate Authority. He emphasised that from the Assignment Deed it is very clear that earlier the appellant were the owner of the brand name of Blue Dot, but w.e.f. 01/4/92 the brand name has been transferred to M/s Standard Sulphonators (P) Ltd. and hence during the period of dispute, the appellant were no longer the owner of the brand name and accordingly when the owner of this brand name is M/s Standard Sulphonators (P) Ltd., the goods affixed with brand name blue dot were not be eligible for the SSI exemption. He also pointed out to the observation in the order-in-original mentioning that the appellant themselves under their letter dated 14/9/94 to the Department had informed that the Blue Dot is the registered brand name of M/s Standard Sulphonators (P) Ltd. He therefore pleaded that there is no infirmity in the impugned order.

5. We have considered the submissions from both the sides and perused the records.

6. The period of demand in this case is from January 1994 to March 1994 and October 1994 to December 1994. The duty demand for the period from October 1994 to December 1994 is Rs. 3,78,241/- and the remaining amount of Rs. 62,897/- out of the total duty demand of Rs. 4,41,138/- pertains to January  March 1994 period and both the demands are on the basis of denial of SSI exemption in respect of the goods bearing the brand name Blue Dot on the ground that the brand name Blue Dot does not belong to appellant and it belongs to M/s Standard Sulphonators (P) Ltd.. However, it is seen that the show cause notice for October 1994 to December 1994 for demand of the duty of Rs. 3,78,241/- which in the present case which has been adjudicated by the Assistant Commissioner vide order-in-original dated 12/5/98, had also been adjudicated by the Joint Commissioner vide order-in-original dated 31/8/01 alongwith another show cause notice for an amount of Rs. 5,34,274/- for the period from July to September 1994, the appeal against the Joint Commissioners order dated 31/8/01 had been filed to the Commissioner (Appeals) and the Commissioner (Appeals) vide order-in-appeal dated 28/6/04 had set aside the order. No appeal has been filed by the Department against Commissioner (Appeals)s order dated 28/6/04. However, when against the Assistant Commissioners order dated 12/5/98 confirming duty demands of Rs. 3,78,241/- for the period from October 1994 to December 1994 and duty demand of Rs. 61,897/- for the period from January 1994 to March 1994 an appeal was filed to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 16/12/05 has upheld the Assistant Commissioners order against which the present appeal has been filed. Thus, in respect of duty demand of Rs. 3,78,241/- for period from October 1994 to December 1994, there are two conflicting order of the Commissioner (Appeals).

7. The basis of duty demand in this case is that the brand name Blue Dot which has been used on the Detergent Powder does not belong to the Appellant and it belongs to M/s Standard Sulphonators (P) Ltd. However, other than the letter dated 14/9/94 of the appellant which is not on record, there is no other evidence in this regard. On the contrary, there is an agreement dated 01/4/92 between the appellant and M/s Standard Sulphonators (P) Ltd. placed on record according to which the brand name Blue Dot is owned by the appellant and it had been transferred and assigned under a Deed of Assignment to M/s Standard Sulphonators (P) Ltd. and there is another agreement of the same date which cancelled the Assignment Deed, as a result of which the appellant remain the owner of the brand. The order of the Commissioner (Appeals) does not clarify this aspect, as according to the findings of Commissioner (Appeals) in the impugned order, the owner of the brand name were M/s Standard Sulphonators (P) Ltd. and the transfer of the brand name and goodwill of the business must be from M/s Standard Sulphonators (P) Ltd. to M/s Universal Detergents (P) Ltd. If this is so, the owner of the brand name would be M/s Universal Detergents (P) Ltd. Thus, the findings of the Commissioner (Appeals) in the impugned order are against the Department stand. In this regard, the findings of the Commissioner (Appeals) are reproduced below :-

I have carefully gone through the impugned Order-in-Original, the case laws, grounds of appeal and the record of personal hearing. The main issue in the instant case is to decide whether the Appellants are owner of brand name Blue Dot or not. In this regard the Department had alleged that the actual owner of the said brand is M/s Standard Sulphonator (P) Ltd., Kanpur and, therefore, the Appellants are not entitled for the exemption under the Notification No. 1/93 dated 28/2/93. The Appellants have pleaded that they have submitted a deed of agreement dated 01/4/92 in respect of the said brand name which reveals that the said brand name Blue Dot was transferred in favour of the Appellants for all purposes. After going through the deed it is found that there are many lapses in the deed. First of all, the deed is not registered one. Secondly it has been assigned temporarily for a consideration of Rs. 50,000/- and it has not been sold of finally forever. The third and most objectionable flaw of the deed does not empower M/s Universal Detergent to avail the exemption under Notification No. 1/93 dated 28/2/93. According to deed M/s Universal Detergent are Assignors and M/s Standard Sulphonators (P) Ltd., are Assignees and for the transfer of the trade marks alongwith the goodwill of business concerned it has been mentioned in the deed that The Assignor (M/s Universal Detergent) hereby assigns and transfer unto the Assignees (M/s Standard Sulphonators (P) Ltd.,) all the said trade marks alongwith the good will of the business. Thus trade marks and good will of the business has been transferred from M/s Universal Detergent (Assigner) to M/s Standard Sulphonator (Assignees) but this is ab-initio wrong because M/s Universal Detergent were not the owner of brand name. In fact the owner of the brand were M/s Standard Sulphonator and therefore the transfer of brand & goodwill of the business must be from M/s Standard Sulphonator to M/s Universal Detergent.

8. We also find that by the order dated 28/06/04 of the Commissioner (Appeals) the appeal filed by the appellant had been allowed and in that order it has been held that it is the appellant who is the owner of the brand name. No appeal has been filed by the Department against this order. Moreover, in terms of the observations of the Commissioner (Appeals) in the impugned order, the appellant is the assignee of the brand name, in question, on transfer from M/s Standard Sulphonators (P) Ltd. and if this is so, they would be eligible for the SSI exemption. In view of this, the impugned order is not sustainable. The same is set aside. The appeal is allowed.

(Dictated and pronounced in open court.)

(Rakesh Kumar)

Member (Technical)

(S.K. Mohanty)

Member (Judicial)

PK

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