Gobind Expeller Co. Pvt. Ltd. vs CESTAT

Rajive Bhalla, J.—By way of this order, we shall dispose of Central Excise Appeal Nos. 45 and 46 of 2013, as they involve adjudication of a similar question of law, namely, whether in similar circumstances, the Tribunal could pass different orders. Counsel for the appellant submits that apart from the fact that the financial hardship of the appellant has not been considered much less adverted to, the Tribunal, in a similar case where trademark was being used by two different firms, was waived the condition of pre-deposit, whereas in the case of the appellant, it has held to the contrary, though, it was accepted before the Tribunal that both the appellants use the same trademark. It is further submitted that the mere fact that the Memorandum of Understanding (MOU) was not produced before the Assessing Officer, is entirely irrelevant as there was no occasion at that stage to produce the MOU nor was any order passed requiring the appellant to produce the MOU. It is further submitted that the appellants are financially incapable of paying the demand raised by the respondents.

Counsel for the Revenue, however, submits that as the learned Tribunal has, in the exercise of its discretion, already accepted the appellant''s application for stay by reducing the amount of pre-deposit to 50% of the demand raised, the impugned order is neither perverse nor arbitrary and, therefore, does not call for interference.

We have heard counsel for the parties, perused the impugned order.

The learned Tribunal has reduced payment of pre-deposit by the appellant to 50% of the amount. However, in the case of 2013 (196) ECR 1 01 , when a similar question, namely, the common use of a trademark by two different entities arose, has while basing its opinion on the judgment of the Hon''ble Supreme Court in AIR 2005 SC 2891 held as follows:-

Hon''ble Supreme Court in the matter of C.C.E., Chandigarh v. Bhalla Enterprises while dealing with similar situation held thus:-

The apprehension of the assessees that they may be denied the exemption merely because some other traders even in a remote area of the country had used the trade mark earlier is unfounded. The notification clearly indicates that the assessee will be debarred only if it uses on the goods in respect of which exemption is sought, the same/similar brand name with the intention of indicating a connection with the assessees'' goods and such other person or uses the name in such a manner that it would indicate such connection. Therefore, if the assessee is able to satisfy the assessing authorities that there was no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, it would be entitled to the benefit of exemption. An assessee would also be entitled to the benefit of the exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name.

In view of aforesaid judgment of Hon''ble Supreme Court, prima facie, we are of the view that the appellant has been able to make a strong prima facie case, in appeal which justifying the waiver of condition of pre-deposit. The stay applications are accordingly allowed and condition of pre-deposit of duty demand, interest and penalty is dispensed with and recovery stayed.

In the appeals filed by the appellants, the learned Tribunal has held to the contrary by holding that failure of the appellant'' to produce the MOV before the Tribunal and before the Assessing Officer, does not entitle the appellants to similar relief. As there is no denial that the trade mark is being used in common by both appellants, the learned Tribunal should have considered this aspect.

In view of what has been stated hereinabove, the appeal is allowed, the impugned order is set aside and the application for waiver of pre-deposit is restored to the Tribunal for consideration, in accordance with law. Parties are directed to appear before the learned Tribunal, on 16-8-2013.