COMMISSIONER CENTRAL EXCISE, DELHI versus M/S. ACE AUTO COMP. LTD.

Citation: [2010] 14 S.C.R. 1101 · Decided: 16-12-2010 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2010] 14 (ADDL.) S.C.R. 1101 
COMMISSIONER CENTRAL EXCISE, DELHI 
v. 
MIS. ACE AUTO COMP. LTD. 
(Civil Appeal No. 3051 of 2003) 
DECEMBER 16, 2010 
(D.K. JAIN AND H.L. DATTU, JJ.) 
Central Excise Act, 1944 - Excise duty - Small scale 
industrial unit (SS/) exemption - Assessee using brand name 
A 
B 
of another person on its goods and supplying the goods to 
C 
the said company - Benefit of SS/ Notification No. 1193 CE 
dated 28.02.1993 and 16197 CE dated 01.04.1997 -
Entitlement to - Held: Assessee not entitled to the benefit of 
the exemption - By using the said brand name, assessee 
intended to indicate a connection between the goods D 
manufactured by them and other company as also the quality 
of their product as that of a product of the other company -
Notification No. 1193 - CE dated 28.02.1993 and Notification 
No. 16197- CE dated 01.04.1997. 
The respondent-assessee, a small scale industrial 
unit, used another person's brand name along with their 
own brand name on the goods manufactured and 
claimed the benefit of SSI Notification Nos. 1/93-CE dated 
28.02.1993 and 16/97-CE dated 01.04.1997. After issuing 
a show cause notice to the respondent, the Adjudicating 
• Authority imposed excise duty and penalty, as mentioned 
E 
F 
in the notice. However, the Commissioner set aside the 
order imposing duty and the penalty. In appeal, the 
Tribunal held that the respondent was entitled to the 
benefit of Notification Nos. 1/93-CE and 16/97-CE. G. 
Therefore, the Revenue filed the instant appeal. 
Allowing the appeal, the Court 
HELD: 1.1 The Notif~~e~ion No. 1 /93 " CE dated 
H . 
1102 SUPREME COURT REPORTS [201 OJ 14 (ADDL.) S.C.R. 
A 28.02.1993 as amended, grants exemption from payment 
of central excise duty to small scale industrial units. It 
contains the definition of "brand name" and provides that 
the exemption contained therein shall not be available to 
goods bearing the brand name of another person. 
B Notification No. 16197- CE dated 01.04.1997 contains the 
same. It is manifest from a bare reading of Clause 4 of 
Notification no. 1193 - CE, read with Explanation IX that it 
clearly debars an assessee from the benefit of exemption 
under the Notification, if he uses another person's brand 
c or trade name with the intention of indicating a 
connection between the assessee's goods and such 
other person. The object of the exemption Notification is 
to grant benefits only to those industries which otherwise 
do not have the advantage of brand or trade name. [Paras 
.D 10 and 11] [1109-E; 1110-B-E] 
Commissioner of Central Excise, Chandigarh-I/ vs. 
BhallaEnterprises (2005) 8 SCC 308; Commissioner of 
Central Excise,Raipur vs. Hira Cement. (2006) 2 SCC 439; 
Kohinoor Elastics (P) Ltd. vs. Commissioner of Central 
E Excise, Indore (2005) 7 sec 528, relied on. 
Commissioner of Central Excise, Trichy vs. Grasim 
Industries Ltd.(2005) 4 SCC 194.- referred to. 
1.2. In order to avail of the benefit of the exemption 
F Notification, the assessee must establish that his product 
is not associated with some other person. If it is shown 
that the assessee has affixed the brand name of another 
person on his goods with the intention of indicating a 
connection between the assessee's goods and the 
G goods of another person, using such name or mark, then 
the assessee would not be entitled to the benefit of 
exemption notification. If the assessee is able to satisfy 
the Adjudicating Authority that there was no such 
intention, or that the user of the brand name was entirely 
H 
COMMISSIONER CENTRAL EXCISE, DELHI v. ACE 1103 
AUTO COMP. LTD. 
fortuitous, it would be entitled to the benefit of the 
A 
exemption. [Para 14) [1112-F-H] 
1.3. In the instant case, the brand name "TATA" did 
not belong to the assessee. By using the said brand 
name, the assessee not only intended to indicate a 
connection between the goods manufactured by them 
and a Tata Company, but also the quality of their product 
B 
as that of a product of Tata Company, as they were 
supplying their goods to the said company. Thus, the bar 
created in Clause 4 read with Explanation IX of the C 
Notification is clearly attracted in the instant case, 
disentitling the assessee from the benefit of the 
exemption Notifications under consideration. The 
decision of the tribunal is clearly erroneous. The 
impugned order is set aside and the order passed by the 
Adjudicating Authority is restored. [Paras 15 and 16) 
D 
[1113-A-D] 
Commissioner of Central 

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