Case: Commnr. Of Central Excise, Mumbai Vs. M/S. Kalvert Foods India Pvt. Ltd.

3. The respondent No. 1, M/s. Kalvert Foods India Pvt. Ltd. is a company (in short hereinafter referred to as the Company) engaged in the manufacture of P & P Food Products, such as, assorted jams, pickles, squashes, cooking sauces, chutneys, syrups, synthetic vinegars etc. The company is also trading in sugar, salt and pepper by packing into small packs. The respondent No. 2, Shri Yunus A. Kalvert is the Managing Director of the Company.4. On 22.11.2000, on receiving information that respondents were indulging in clandestine removals of its finished P & P food products without payment of Central Excise Duty, the revenue authorities searched the factory premises of the respondent no. 1. Searches were also carried out at the premises of its distributors/wholesale dealers/traders of respondent no. 1 situated in and around Mumbai and other connected premises.5. During the search conducted at the premises of the respondent no. 1 several incriminating documents, articles and records were found. A huge quantity of finished goods were also found lying in the factory premises. Further, it was also noticed that there was one tempo parked inside the factory premises loaded with cartons containing the excisable goods manufactured by the said company and was about to leave the factory premises. On inquiry from the driver of the said tempo it was found that the driver was not in possession of any documents relating to the goods loaded in the said tempo. On inspection of invoices at the premises of the respondent no. 1, it was also found that there were two invoices with the same serial number, in respect of different products. The officers took stock of the goods in the factory and it was found that the finished goods lying in the factory were in excess of the stock shown and accounted for in the RGI Register.6. Specific allegation against the respondent is that the goods found lying excess in the stock than what were entered into RGI register, valued at Rs. 7,33,668/- and the same was seized.7. Thereafter, search was also carried out at the premises of the dealers/traders, to whom the company allegedly supplied the finished goods. The goods found lying in those premises to the value of Rs. 6,22,946/- were also seized on the ground that they were not duty paid.8. Similarly, the search was carried out by the officers on 28-11-2000, at the premises of M/s. Relish Trading Company (in short RTC)/the selling agent of the respondent-company, M/s. Sai Krupa, a partnership firm of the Managing Director of the respondent No. 1; and at the premises of sole proprietor of RTC and records pertaining to the sale and purchase of the goods lying in the offices of these companies, were seized. It revealed to the searching officers that, in fact, the respondent- company had cleared jams, syrup, sauces, pickles, etc., from the factory premises to the above said selling agents without payment of duty, but had shown those clearances as that of the sugar, in the invoices and had also cleared the branded goods to the dealers/traders.9. After completion of the entire process a show cause notice was issued to the Company and its Director. Such notices were also issued to the proprietor of M/s. RTC, its partner and M/s. Sai Krupa Corporation. Through notices issued, duty demand was raised from the company and penalty was also proposed to be imposed on the company. Reply was filed by the respondents to the aforesaid show cause notices.10. The adjudicating authority, namely, the Commissioner of Central Excise, Mumbai, passed an order dated 27.02.2002, holding that the respondent no. 1 with the connivance of the respondents 2 and 3 have deliberately attempted to pass off excisable goods as non-excisable goods with an intent to evade payment of excise duty. Consequently, the Commissioner confirmed the duty demand and ordered confiscation of the seized goods and also imposed penalty equivalent to the amount of duty on the company and also directed to pay interest on the excise duty etc.11. Being aggrieved by the aforesaid order, respondents filed appeals before the CEGAT. The said appeals were heard and Tribunal passed the judgment and order on 02.08.2002, which is impugned herein. The Tribunal by its order set aside the findings of the Commissioner of Central Excise, Mumbai holding that the respondents were not guilty of clandestine removal of excisable goods and also that the goods of respondent no. 1 were not excisable inasmuch as they were allegedly not packed in containers under a brand name and therefore not required to pay any excise duty.12. The present appeals are directed and preferred against the said judgment and order on which we heard learned counsel appearing for the parties.

Court's reasoning:
18. During the course of arguments learned counsel appearing for the respondent submitted before us that although the aforesaid statements of Managing Director of the Company and other persons were recorded during the course of judicial proceedings but the same were retracted statements, and therefore, they cannot be relied upon. However, the statements were recorded by the Central Excise Officers and they were not police officers.Therefore, such statements made by the Managing Director of the Company and other persons containing all the details about the functioning of the company which could be made only with personal knowledge of the respondents and therefore could not have been obtained through coercion or duress or through dictation. We see no reason why the aforesaid statements made in the circumstances of the case should not be considered, looked into and relied upon.19. We are of the considered opinion that it is established from the record that the aforesaid statements were given by the concerned persons out of their own volition and there is no allegation of threat, force, coercion, duress or pressure being utilized by the officers to extract the statements which corroborated each other. Besides, the Managing Director of the Company on his own volition deposited the amount of Rs. 11 lakhs towards excise duty and therefore in the facts and circumstance of the present case, the aforesaid statement of the counsel for the respondents cannot be accepted. This fact clearly proves the conclusion that the statements of the concerned persons were of their volition and not outcome of any duress.20. During the course of arguments our attention was also drawn to the statement of Managing Director of the Company where he had admitted the fact of clandestine clearance of excisable goods and therefore has voluntarily come forward to sort out the issue and to pay the Central Excise duty liability and that he has paid Central Excise duty voluntarily under TR6 Challans totaling to Rs. 11,00,000/- on various dates. Similarly statement of Miss Vinita M. Khanolkar - proprietor of RTC was also recorded under Section 14 of the Central Excise Act, 1944 along with Shri Shekhar Mogaviera - Production Supervisor of M/s. Kalvert Foods India Pvt. Ltd. Statements of various other persons were also recorded under Section 14 of the Central Excise Act.In view of the aforesaid position and since there was clandestine removal of excisable goods, the period of limitation in the present case would have to be computed from the date of their knowledge, arrived at upon raids on the premises. In the present case therefore the extended period of limitation would be available as there was suppression of facts by the respondents with the intention to evade the central excise duty inasmuch as they did not account for the manufactured goods in the prescribed record.In our considered opinion, the aforesaid findings are also totally wrong and recorded in violation of the law of Trade Marks. During the course of arguments, our attention was drawn to a Judgment of this Court in the case of TARAI FOOD LTD. V. COMMISSIONER OF CENTRAL EXCISE, MEERUT-II, reported in 2007(8) S.T.R. 442 (S.C.). While placing reliance on the said Judgment, the counsel appearing for the respondents submitted that what is a `Brand name is as stated in paragraph 4 of the said Judgment. He relied on the said definition of `Brand name and then submitted that the phraseImproved Quick Frozen Frenchwas not held to be a brand name, and therefore, according to him the brand name of the respondent companycould not be termed as. In our considered opinion, the aforesaid brand named Quick Frozen Frenchis a descriptive word and the same could not have been termed and coined either as aor aer any circumstances. There can be no dispute therefore with regard to the proposition of law laid down by this Court in the aforesaid decision. We may also refer to another decision of this Court in Astra Pharmaceutical Pvt. Ltd. V. Collector of Central Excise, Chandigarh, reported in [1995 (75) E.L.T. 214 (S.C.)]. That was a case of Pharmaceutical product. In the said decision also the manner and scope ofnd distinction between `House mark andhas been brought out. It was stated therein by this Court thatch is usually a device in the form of an emblem, word or both is an identification of the manufacturer which is compulsory under the Drug Rules. On the other hand, product mark or brand name is invariably a wordTherefore, it is not necessary thatld be compulsorily registered. A person can carry on his trade by using ach is not even registered. But in violation/infringement of trade mark, remedy available would be distinctly different to an unregistered brand name from that of remedy available to a registered brand name.35. Unfortunately, the Tribunal did not consider and properly appreciate the apparent distinction between the two distinct expressions i.e.and thereby proceeded to set aside the well-written Judgment passed by the Commissioner of Central Excise, Mumbai who has recorded his reasons giving cogent basis for his reasoning.In view of above discussion, it is clear that what was being used by the respondent under the expressionand not aas sought to be alleged by the respondent and has been wrongly accepted by the Tribunal. Therefore, the articles of assorted jams, pickles, squashes, cooking sauces, chutneys, syrups, synthetic vinegars etc. manufactured and sold by the respondent company under a brand namewere liable to be charged for excise duty at the rate prescribed in the Excise Law.