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The Hole in the Wall in Bodmin was named the best pub in the county by CAMRA Kernow - in part due to its unique decor - but has now been stripped of the award.
Landlord Steve Hall says the issue has been blown out of proprotion.
The pub landlord was defiant in response to the ruling and called out the Campaign for Real Ale for taking the Nazi memorabilia 'out of context'.
A Cornish pub has been stripped of a coveted pub of the year award after a single person complained about it having a Nazi armband on display.
A pub described having a "great, friendly atmosphere" has had its "well deserved" award withdrawn by the Campaign for Real Ale.