Saturday, January 15, 2011

EXCISE BENEFIT DENIED FOR USE OF COMBINATION BRAND NAMES

The Supreme Court (SC) has set aside the order of the excise appellate tribunal which had granted
duty benefits to Ace Auto Co Ltd, a small scale industry which supplied clutch plates and related
items to Tata vehicles. On the cover assembly of the products manufactured by Ace Auto, it
prefixed its symbol and logo with Tata. Ace Auto then claimed excise benefits granted to small scale
units. It was denied by the Commissioner of Central Excise, Delhi. In the dispute, the tribunal
ruled that the company was entitled to the benefit. However, the Supreme Court stated that in order
to avail of the exemption notification of October 2002, the SSI manufacturer must prove that its
product was not associated with another person. If it is shown that the manufacturer has affixed
the brand name of another person on its goods with the intention of a connection between their
products, the benefit would not be available to the SSI. However, if the assessee company is able
to prove there was no such intention or that the use of the brand name was entirely fortuitous, it would be entitled to the benefit of exemption.

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