Case: Commnr. of Central Excise, Hyderabad IV Vs. Stangen Immuno Diagnostics

Excise Act, the connection must be of such a nature that it reflects on the aspect of manufacture and deal with quality of the products. No hard and fast rule can be laid down however it is possible that words which merely indicate the party who is marketing the product may not be sufficient. As we are not dealing with such a case we do not express any opinion on this aspect.16. This Court has, in the case of Royal Hatcheries Pvt. Ltd. v. State of A.P., 1994 Supp (1) SCC 429, already held that words to the effect "that is to say" qualify the words which precede them. In this case also the words "that is to say" qualify the words "brand name or trade name" by indicating that these terms must therefore be understood in the context of the words which follow. The words which follow are of wide amplitude and include any word, mark, symbol, monogram or label. Even a signature of an invented word or any writing would be sufficient if it is used in relation to the product for purpose of indicating a connection between the product and the other person/company." 13. Likewise, in CCE v. Bhalla Enterprises, (2005) 8 SCC 308 this Court was eloquent in observing that as per the aforesaid Notification, 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. 14. All these judgments were taken note by this Court in a recent case in Nirlex Spares (P) Ltd. v. Commissioner of Central Excise, (2008) 2 SCC 628. On the facts of that case, the Supreme Court was of the opinion that the assessee had not offended condition no.4. In that case, the goods were manufactured by the assessee and the Marketing Company which was its marketing agent. On the packing of goods, brand names of the assessee "INTATEX" and "INTACO" were clearly and prominently printed. In between these two brand names, a hexagonal shape/design, which was claimed by the Department to be the brand of the Marketing Company, was also printed. In this backdrop, the question was as to whether the assessee company was using the said hexagonal shape/design of other person. On the facts of that case, the Court found that there was nothing on record to show that the said hexagonal shape/design belonged to or was owned by the Marketing Company and thus they had permitted the assessee to use the same on the corrugated boxes. The Court also found that the hexagonal design/shape could not be said to be descriptive enough to serve as an indicator of nexus between the goods of the assessee and the Marketing Company. On this basis, it was concluded that the alleged monogram could not be the brand name or trade name of the Marketing Company. 15. We would also like to reproduce the following observation from Commissioner of Central Excise, Chandigarh II v. Bhalla Enterprises, (2005) 8 SCC 308:- "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 is 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." These observations bring out two significant aspects namely:- (1) As per the Notification, the assessee would 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. If there is 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.(2) The assessee would also be entitled to the benefit of exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name. 16. Having clarified the real position, we find that matter is not examined by the authorities below in the right perspective. The factual aspects can be established only before the adjudicating authority. Therefore, while setting aside the judgment, we remit the case back to the Commissioner, Central Excise to hear the respondent de novo on the show cause notice which was issued by him and decide the matter afresh after taking into consideration the law laid down in the aforesaid judgments. It would be open to the respondent to place on record whatever material it wants to place in consonance with the stand already taken in the reply to show cause notice and opportunity in this behalf shall be given to the respondent. Respondent shall also be given oral hearing by the Commissioner before recording its finding on those issues and deciding the fate of show cause notice. It would be open to the respondent to press the plea of limitation as well.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]6. Explanation VIII defines that brand name or trade name. As per this explanation, it would be a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of the trade between such specified goods and some person using such name or mark with or without any indication of the identity of the person. Therefore, what follows from the reading of this Explanation is that if the brand name is used in relation to the specified goods indicating a connection in the course of the trade between such specified goods and some other person using the name, it would fit the description and the matter would be covered by the mischief of Explanation VIII. It is no where stated that brand name which is the name of other person and is being used by the SSI which is claiming benefit has to be in relation to same goods. Therefore, that could not have been reason to drop the proceedings and the CEGAT was not justified in dismissing the appeal of the Department on this ground.7. The aforesaid principle of law is no more res integra and has been decided by this Court authoritatively in couple of judgments. In Commissioner of Central Excise,v. Mahaan Dairies, (2004) 11 SCC 798  this Court while interpreting the similar nature of definition of brand name or trade name, held as underhave today delivered a judgment in CCE v. Rukmani Pakkwell Traders wherein we have held in respect of another notification containing identical words that it makes no difference whether the goods on which the trade name or mark is used are the same in respect of which the trade mark is registered. Even if the goods are different, so long as the trade name or brand name of some other company is used the benefit of the notification would not be available. Further, in our view, once a trade name or brand name is used then mere use of additional words would not enable the party to claim the benefit of the notification.It is clear from the above that the Court was of the view that even if the goods are different, so long as brand name or trade name of some other Company is used, the benefit of Notification would not be available. To the same effect is the judgment of this Court in the case of Commissioner of Central Excise,v. Bhalla Enterprises (2005 (8) SCC 308 ) wherein aforesaid judgment in Mahaan Dairies was followed by reiterating the same principle.We would also like to reproduce the following observation from Commissioner of Central Excise, Chandigarh II v. Bhalla Enterprises, (2005) 8 SCCapprehension 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 is 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 suchobservations bring out two significant aspectsAs per the Notification, the assessee would 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. If there is 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.(2) The assessee would also be entitled to the benefit of exemption if the brand name belongs to the assessee himself although someone else may be equally entitled to such name.We would like to observe that if the aforesaid contention of the respondent is factually correct, viz. The respondent used the brand name as the owner thereof itself, and was not using the brand name as belonging to DRL and authorised by DRL, then the submission of Ms. Tripathi is legally tenable.Having clarified the real position, we find that matter is not examined by the authorities below in the right perspective. The factual aspects can be established only before the adjudicating authority. Therefore, while setting aside the judgment, we remit the case back to the Commissioner, Central Excise to hear the respondent de novo on the show cause notice which was issued by him and decide the matter afresh after taking into consideration the law laid down in the aforesaid judgments. It would be open to the respondent to place on record whatever material it wants to place in consonance with the stand already taken in the reply to show cause notice and opportunity in this behalf shall be given to the respondent. Respondent shall also be given oral hearing by the Commissioner before recording its finding on those issues and deciding the fate of show cause notice. It would be open to the respondent to press the plea of limitation as well.