COMMISSIONER OF CENTRAL EXCISE, HYDERABAD IV versus M/S. STANGEN IMMUNO DIAGNOSTICS
[2015] 4 S.C.R. 528, Supreme Court of India, 2015
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
[2015] 4 S.C.R. 528 
A 
COMMISSIONER OF CENTRAL EXCISE, HYDERABAD IV 
B 
c 
v. 
M/S. STANGEN IMMUNO DIAGNOSTICS 
(Civil Appeal No. 9157 of 2003) 
MARCH 19, 2015. 
[A.K. SIKRI AND R. F. NARIMAN, JJ.] 
Central Excise Act, 1944 - Excise duty - Benefit of 
exemption/concessional rate of duty under the Notification 
No.175186-CE dated 1.3.1986 - Assessee-Small scale 
industrial unit (SS/) using the brand name 'Stangen' on 
the goods manufactured by it - Assessee granted benefit 
o of exemption/concessional rate of excise duty under the 
Notification -
Subsequently, issuance of notice to 
assessee that benefit of Notification was claimed wrongly 
as the use of brand name 'Stangen' and also logo 
belonged to DRL Company-manufacturer of bulk drug and 
E under the Notification, exemption is denied in cases where 
the manufacturer (SS/) affixes the specified goods with a 
brand name or trade name registered or not, of another 
person who is not eligible for grant of exemption under the 
Notification - Proceedings dropped by the Adjudicating 
F Authority on the ground that the goods were different -
Tribunal also dismissed appeal filed by the department 
holding that the goods manufactured by the assessee 
were different from the goods manufactured by DRL - On 
appeal, held: Authorities below did not examine the matter 
G in the right perspective -
Factual aspects can be 
established before the Adjudicating Authority -
Thus, 
matter remitted back to the Commissioner, Central Excise 
H
528

( 
COMMNR. OF CENTRAL EXCISE, HYDERABAD IV v. 
529 
STANGEN IMMUNO DIAGNOSTICS 
to hear the respondent de nova on the said notice and A 
decide the matter afresh after taking into consideration 
the law laid down - Notification No. 175186-CE dated 
1.3.1986. 
Commissioner of Central Excise, Chandigarh-I vs. 
B 
Mahaan Dairies (2004) 11 SCC 798; Commissioner of 
Central Excise, Chandigarh-II vs. Bhalla Enterprises 2005 
(8) sec 308; Tarai Food Ltd. v. CCE (2007) 12 sec 
721; CCE vs. Grasim Industries Ltd. 2005 (3) SCR 466: 
(2005) 4 SCC 194; Nirlex Spares (P) Ltd. vs. C 
Commissioner of Central Excise 2008 (1) SCR 117: 
(2008) 2 sec 628 - referred to. 
Case Law Reference 
(2004) 11 sec 798 
Referred to. 
Para 7 
2005 (8) sec 308 
Referred to. 
Para 8 
(2007) 12 sec 121 
Referred to. 
Para 11 
2005 (3) SCR 466 
Referred to. 
Para 12 
2008 (1) SCR 117 
Referred to. 
Para 14 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
9157 of 2003. 
From the Judgment and Order dated 31.12.2002 of the 
Customs Excise and Gold (Control) Appellate Tribunal South 
Zonal Bench, Bangalore in Appeal No. E/66/1999. 
A. K. Sanghi, Nisha Bagchi, Ritesh Kumar, B. Krishna 
Prasad for the Appellant. 
Neelima Tripathi, S. Majuvdan (For Dr. Kailash Chand) 
for the Respondent. 
D 
E 
F 
G 
H
530 
SUPREME COURT REPORTS 
[2015] 4 S.C.R. 
A 
The Judgment of the Court was delivered by 
A.K. SIKRI, J. 1. The respondent herein is the 
manufacturers of composite diagnostics or laboratory 
regents and pharmaceutical goods. It is registered as a 
B small scale industrial unit (SSI unit). The respondent was 
using the brand name 'Stangen' on the goods manufactured 
by it. It is an admitted case that this brand name 'Stangen' 
was affixed on the packing of the goods and even on the 
goods manufactured. The respondent started availing the 
C benefit of exemption/concessional rate of duty under 
Notification No.175/86-CE dated 1.3.1986 which grants 
exemption or concessional rate of excise duty to the SSI 
units. 
o 
2. However, 
in the year 1997 a show cause 
notice was issued to the respondent by the appellanU 
Excise Department stating that the respondent is wrongly 
claiming the benefit of the aforesaid Notification inasmuch 
as use of the brand name 'Stangen' and also the logo 
E belonged to Dr.K.Anji Reddy, Chairman of Dr.Reddy's 
Laboratories (DRL). It was stated that DRL is the 
manufacturer of bulk drugs falling under Chapter 30 of the 
Central Excise Tariff Act, 1985, and the trade mark 
'Stangen' and related logo are used on the printed labels 
F foils of the P & P medicine manufactured by DRL and also 
appear on .the classification list filed by the DRL. On this 
basis in the show cause notice it was mentioned that the 
respondent was not entitled to the benefit
of concessional 
rate of duty under the aforesaid Notification inasmuch as 
G para 7 of the said Notification denied exemption in those 
cases where the manufacturer (SSI) affixes the specified 
goods with a brand name or trade name, registered or not, 
of another person who is not eligible for grant of exemption 
H under this Notification. Explanation VII I to the said
COMMNR. OF CENTRAL EXCISE, HYDERABAD IV v. 
531 
STANGEN IMMUNO DIAGNOSTICS [AK. SIKRI, J.] 
Notification which defines brand name reads as under:-
A 
" Explanation VIII - "Brand name" or "trade name" shall 
mean a brand name or trade name, whether 
registered or not, that is to say a name or a mark, 
such as symbol, monogram, label, signature or B 
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 trade 
between such specified goods and some person 
using such name or mark with or without any indication C 
of the identity of that person. 
3. The respondent replied to the aforesaid show cause 
notices in which it was admitted that Dr.K.Angi Reddy is 
the Chairman of Dr. Reddy Group of Industries which D 
includes the respondent Company as well as DRL. The 
defence, however, was that Dr. K.Angi Reddy had not 
assigned the trade mark either to the respondent firm or any 
other manufacturer. It was also mentioned that the 
respondent as well as the DRL are Public Limited E 
Companies having separate legal entities of their own with 
their own independent spheres of activities. In this behalf 
the contention was that DRL manufactured altogether 
different products than the products mentioned by the 
respondent Company. A pl_ea was also raised that Dr. 
F 
K.Angi Reddy in his individual capacity was not a 
manufacturer within the meaning of said expression as 
defined in
the Central Excise Act. By raising the aforesaid 
submissions request was made to drop the proceedings. 
The aforesaid argument raised by the respondent G 
persuaded the Adjudicating Authority who dropped the 
proceedings. 
4. Challenging the said order, the Department filed an 
appeal before the Customs, Excise and Gold (Control) 
H
.. 
532 
SUPREME COURT REPORTS 
[2015) 4 S.C.R. 
A Appellate Tribunal (CEGAT). The contention of the 
Department was that dropping of the proceedings by the 
Commissioner only on the ground that the goods 
manufactured by the respondent are different from the 
goods manufactured by DRL was untenable as it is not a 
B relevant factor at all. However, this plea of the Department 
did not even prevail with the CEGAT which has, vide 
impugned judgment dated 31.12.2003, dismissed the 
appeal observing that the goods manufactured by the 
assessee were different from the goods manufactured by 
C DRL and as per the settled law the use of brand of another 
would attract only when that the Commissioner had reached 
an erroneous finding with regard to the goods being 
different. This order of the CEGAT is assailed in the 
D present proceedings. 
5. We have already taken note of para 7 of 
Notification No.175/86-CE as well as definition of brand 
name appearing in Explanation VIII contained in the said 
Notification. As far as para 7 is concerned, it states that the 
E benefit of exemption would not apply to the specified goods 
where a manufacturer affixes the specified goods with 
brand name or trade name (registered or not) of another 
person who is not eligible for grant of exemption under this 
F Notification. As per this, in order to deny the exemption 
under this Notification, the Department has to show that on 
the goods which are 
manufactured 
by 
the 
manufacturer i.e. the
SSI, the brand under or trade name 
of another person is affixed and that another person is 
G not eligible for grant of exemption in this Notification. 
H 
In other words, when that other person 
w h o s e 
brand name or trade name is used by the SSI is not itself 
a SSI, then the user is not entitled to exemption under the 
said Notification.
COMMNR. OF CENTRAL EXCISE, HYDERABAD IV v. 
533 
STANGEN IMMUNO DIAGNOSTICS [AK. SIKRI, J.] 
6. Explanation VIII defines that brand name or trade A 
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 B 
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 C 
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 D 
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 
E 
of judgments. In Commissioner of Central Excise, 
Chandigarh-I Vs. Mahaan Dairies (2004) 11 SCC 798 this F 
Court while
interpreting the similar nature of definition of 
brand name or trade name, held as under : 
"We have 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 
G 
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 H
534 
SUPREME COURT REPORTS 
[2015] 4 S.C.R. 
A 
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 
B 
notification. 
8. 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 
C 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, Chandigarh-II vs. Bhalla 
Enterprises (2005 ('8) SCC 308) wherein aforesaid 
judgment in Mahaan Dairies was followed by reiterating the 
D same principle. 
9. At this stage, Mrs. Neelima Tripathi, learned counsel 
appearing for the respondent, had made a plea before us 
to the effect that on the facts of this case the respondent 
E would still be entitled to exemption. Her case in this behalf 
was that the respondent had been using the aforesaid 
name and logo since 1986, and the show cause notice 
pertained to the year 1988. On the other hand the said 
trade name and logo was being registered in favour of Dr. 
F K.Angi Reddy only in the year 1989. Her submission, thus, 
was that in its own independent right the respondent had 
been using the said trade name and logo as an owner 
thereof and therefore, would be entitled to exemption even
if the same was used by the DRL and it is a case where 
G both the parties were using the same trade mark and logo 
simultaneously in there own rights. What is argued is that 
the respondent was not using the trade mark/logo or brand 
name of DRL but it was its own e<nd therefore would not 
H come within the mischief of para 4 of the Notification.
COMMNR. OF CENTRAL EXCISE, HYDERABAD IV v. 
535 
STANGEN IMMUNO DIAGNOSTICS [A.K. SIKRI, J.] 
10. We would like to observe that if the aforesaid A 
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 authorized by DRL, then the submission of Ms. 
Tripathi is legally tenable. 
B 
11. Condition No.4, as already noted above, stipulates 
that the exemption contained in this Notification would not 
be given to a person in respect of goods where 'brand 
name' or 'trade name' of another person is used i.e. the C 
goods bearing the 'brand name' or 'trade name' which 
belongs to some other person. It is immaterial whether 
such 'brand name' or 'trade name' is registered or not. 
However, Explanation IX gives a unique and particular 
definition to the term 'brand name' or 'trade name'. It is D 
clear from the reading of the said explanation that the 
definition of 'brand name' or 'trade name' contained therein 
is concerned with a particular name or mark which is used 
to indicate, in the course of trade, a connection between 
such specified goods as satisfying the criterion provided in E 
aforesaid condition 4 and the manufacturer which is using 
such name or mark with or without any indication of the 
identity of itself. The central idea contained in the aforesaid 
definition is that the mark is used with the purpose to show 
F 
connection of the said goods
with some person who is 
using the name or mark. Therefore, in order to qualify as 
'brand name' or 'trade name' it has to be established that 
such a mark, symbol, design or name, etc. has acquired 
the reputation of the nature that one is able to associate the G 
said mark, etc. with the manufacturer. We are supported in 
this view by series of judgments of this Courtln Tarai Food 
Ltd. v. CCE, (2007) 12 SCC 721, the expression "brand 
name" was explained in the following terms: 
H
536 
A 
B 
SUPREME COURT REPORTS 
[2015) 4 S.C.R. 
"7. The words brand 
name connotes such a mark, symbol, design or 
name which is unique to the particular manufacture 
which when used on a particular product would 
establish a connection between the product and the 
manufacturer. 
xx 
xx 
xx 
9. Furthermore the definition of the words 'brand 
c 
name' shows that it has to be a name or a mark or 
a monogram, etc. which is used in relation to a 
particular product and )Nhich establishes a connection 
between the product and the person. This name or 
mark, etc. cannot, therefore, be the identity of a 
o 
person itself. It has to be something else which is 
appended to the product and which established the 
link." 
12. Thus, what is necessary is that the said mark is of 
E the nature that it establishes connection between the 
product and the person. To the same effect is the judgment 
of Supreme Court in CCE V$. Grasim Industries ltd., (2005) 
4 SCC 194 wherein this Court observed as under: 
F 
G 
H 
"15 ......... ln our view, the Tribunal has completely 
misdirected itself. The term "brand name or trade 
name" is qualified by the words "that is to say".· 
Thus, even though under normal circumstances a 
brand name or a trade name may have the 
meaning as suggested by the Tribunal, for the 
purposes of such a Notification the terms "brand 
name or trade name" get qualified by the words 
which follow. The words which follow are "a name 
or a mark". Thus even an ordinary name or
an 
ordinary mark is sufficient. It is then elaborated that
COMMNR. OF CENTRAL EXCISE, HYDERABAD IV v. 
537 
STANGEN IMMUNO DIAGNOSTICS [A.K. SIKRI, J.] 
the "name or mark" such as a "symbol" or a A 
"monogram" or a "label" or even a "signature of 
invented word" is a brand name or trade name. 
However, the contention is that they must be used in 
relation to the product and for the purposes of 
indicating a connection with the other person. This is B 
further made clear by the words "any writing". These 
words are wide enough to include the name of a 
company. The reasoning given by the Tribunal based 
on a dictionary meaning of the words "write" and 
"writing" is clearly erroneous. Even the name of some C 
other company, if it is used for the purposes of 
indicating a connection between the product and that 
company, would be sufficient. It is not necessary that 
the name or the writing must always be a brand name D 
or a trade name in the sense that it is normally 
understood. The exemption is only to such parties who 
do not associate their products with some other 
person. Of course this being a Notification under the 
Excise Act, the connection must be of such a nature E 
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 
F 
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" G 
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 H
538 
SUPREME COURT REPORTS 
[2015] 4 S.C.R. 
A 
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/ 
B 
company." 
13. Likewise, in CCE Vs. Bhalla Enterprises, (2005) 8 
SCC 308 this Court was eloquent in observing that as per 
the aforesaid Notification, the assessee will be debarred 
C 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. 
D 
14. All these judgments were taken note by this Court 
in a recent case in Nirlex Spares (P) Ltd. Vs. 
Commissioner of Central Excise, (2008) 2 SCC 628. On 
the facts of that case, the Supreme Court was of the 
E 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 
F 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 
G 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 
H had permitted the assessee to use the same on the
COMMNR. OF CENTRAL EXCISE, HYDERABAD IV v. 
539 
STANGEN IMMUNO DIAGNOSTICS [A.K. SIKRI, J.] 
corrugated boxes. The Court also found that the hexagonal A 
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. 
B 
15. We would also like to reproduce the following 
observation from Commissioner of Central 
Excise, 
Chandigarh II Vs. 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. 
c 
D 
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 E 
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 . F 
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 G 
be equally entitled to such name." 
These observations bring out two significant aspects 
namely:-
H
540 
SUPREME COURT REPORTS 
(2015] 4 S.C.R. 
A 
(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 
B 
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 
c 
D 
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 
E 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 
F 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. 
G 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 
H well.

COMMNR. OF CENTRAL EXCISE, HYDERABAD IV v. 
541 
STANGEN IMMUNO DIAGNOSTICS [AK. SIKRI, J.] 
17. The appeal is allowed in the aforesaid terms with A 
no order as to costs. 
18. It would be open to the respondent to press the 
plea of limitation as well. 
Nidhi Jain 
Appeal allowed.