2004 (97) ECC 537 (SC)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

Civil Appellate Jurisdiction

S.N. Variava, Dr. AR. Lakshmanan and S.H. Kapadia, JJ.

Commissioner of Central Excise, Calcutta

Versus

Emkay Investments (P) Ltd. & Anr.

Civil Appeal No. 2360-2361 of 1999

[From the Judgment and Order dated 9.6.98 of the Central Excise Customs and Gold (Control) Appellate Tribunal Calcutta in F.O. Nos. A-593-A-594/CAL/98 in A. Nos. E-246, E-279 of 1992]

Decided on 8.12.2004

SSI Exemption

Brand name -- Notification No. 175/86-CE dt. 1.3.1986 -- Assessees who are the manufacturers of plywood under their own brand name M/s Pelican are disentitled to the benefit of small scale exemption Notification No. 175/86-CE dated 1.3.1986 by using logo indicating "MERINO" on their product along with their brand name.

Revenue's Appeal allowed

PRESENT :

G.E. Vahanvati, Solicitor General, A. Subba Rao, Devadatt Kamat and B. Krishna Prasad, Advs. with him for the appellant.

C. Hari Shanker, V.J. Francis and Anupam Mishra, Advs. for the respondents.

Cases Cited :

1. Astra Pharmaceuticals (P) Ltd. v. Collector of Central Excise, Chandigarh, 1995 (49) ECC 24 (SC) [Paras 12, 21]

2. B.H.E.L. Ancillary Association v. Collector of Central Excise, 1990 (49) ELT 33 (Mad.) [Paras 9, 23]

3. Commissioner of Central Excise, Chandigarh-I v. Mahaan Dairies, 2004 (93) ECC 657 (SC) [Paras 9, 19 & 20]

4. Commissioner of Central Excise, Chandigarh-II v. Bhalla Enterprises, 2004 (173) ELT 225 (SC) [Paras 9, 12, 20]

5. Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders, 2004 (93) ECC 540 (SC) [Paras 9, 18, 19]

6. Festo Controls (P) Ltd. v. CCE, Bangalore, 1994 (72) ELT 919....................... [Paras 19]

7. Rukmani Pakkwell Traders v. CCE, Trichy, 1999 (109) ELT 204...................... [Para 21]

JUDGMENT

Dr. AR. Lakshmanan, J.

Both the above appeals are filed against the common judgment passed by the Central Excise & Gold (Control) Appellate Tribunal, Calcutta in Appeal Nos. E-246/92, E-279/92 and Order No. A-593-594 CAL/98 dated 9.6.1998 reported in 2000(124)E.L.T.741. Both the appeals are against the same and common impugned judgment. Both the above appeals are being disposed of by this common judgment.

2. Briefly stated, the facts of the case are as under:

The respondents-M/s Emkay Investments Private Limited and M/s Plyking who are engaged in the manufacture of plywood classifiable under sub-Heading 4408.90 of the Schedule Act, 1985. The said factory was visited by the Central Excise Officers who found that the respondents are also using the brand/logo "MERINO" along with the brand name "Pelican" on the plywood being manufactured by them and the officers of the Department entertained a view that as the logo of "MERINO" is also being shown on the plywood being manufactured by them, apart from their own logo of "Pelican" and as the owner of the brand "MERINO" i.e. M/s. Merinoply and Chemicals Ltd., is a large scale manufacturer of plywood not entitled to the benefit of small scale exemption Notification No. 175/86-CE dated 1.3.1986, as amended, the respondents were also not entitled to the benefit of the said exemption Notification in view of clause 7 of the same. The second respondent M/s. Plyking is one of the traders from whose premises plywood was seized by the officers of the Central Excise.

3. On adjudication, the Commissioner of Central Excise, Calcutta vide his impugned order held that the logo indicating "MERINO" in a specific manner was the brand name used by M/s. Merinoply and Chemicals Ltd. Who were not eligible for the grant of benefit of Notification No. 175/86-CE and as such denied the benefit to the first respondent firm and accordingly confiscated the seized plywood. The officers also confiscated 223 pieces of plywood from the business premises of M/s Plyking the second respondent herein. The respondents as appellants contended before the authorities that though the word "MERINO" is written in the same style as written on the plywood manufactured by M/s Merinoply and Chemicals Ltd., nevertheless the same will not imply any relation of goods by the respondents under the brand name of "Merino". They also submitted that the brand name of M/s Merinoply and Chemicals Ltd. is "TUFFPLY" and "MERINO".

4. The Departmental representatives countered the arguments of the respondents by arguing that "MERINO" is the brand name and logo registered and owned by M/s Merinoply and the affixation of the same on the product would disentitle the respondents firms from the benefit of Notification in terms of clause 7 read with Explanation VIII as M/s Merinoply and Chemicals Ltd. being a large scale unit, are not entitled to the exemption Notification No. 175/86-CE, clause 7 would be attracted and the respondents firms would become ineligible for exemption.

5. The Commissioner of Central Excise by his order dated 31.3.1992 ordered confiscation of seized goods. The respondents herein filed appeals before the CEGAT against the order of the Commissioner. The CEGAT, by the impugned order, allowed the appeal filed by the respondents herein. Aggrieved by the said order, the appellants preferred these two appeals.

6. We heard Mr. G.E. Vahanvati, learned Solicitor General, appearing for the appellant and Mr. C. Hari Shankar, learned counsel, appearing for respondent No. 1. Respondent No. 2 did not engage a lawyer to represent their case. They sent their counter affidavit by post.

7. The dispute, in the instant case, is as to whether the respondents who are manufacturers of plywood under their own brand name "Pelicon" have made themselves disentitled to the benefit of small scale exemption Notification No. 175/86-CE by using a logo indicating "MERINO" on their products along with their brand name. The next question which arises is as to whether the markings or inscriptions should be considered as the brand name of M/s Merinoply and Chemicals Ltd. and will come within the mischief of Clause 7 read with Explanation VIII of the Notification, as contended by the Department. Clause 7 reads as follows:

"The exemption contained in this Notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this Notification." Explanation VIII of Clause 7 reads as follows:

"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 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 of the identity of that person."

8. Mr. G.E. Vahanvati, learned Solicitor General, submitted that the impugned goods admittedly contained the registered logo "MERINO" belonging to and owned by M/s Merinoply and Chemicals Ltd. Thus it was a clear case where the impugned goods were admittedly affixed with registered logo/trade mark of the other person not eligible to S.S.I. exemption. According to the learned Solicitor General, the CEGAT erred in not appreciating that to attract provision of clause 7 of Notification No. 175/86-CE, it is sufficient that product contained a trade mark/logo of another ineligible person which was fully satisfied in the present case and whether the product also contained a brand name/trade name/ logo of the manufacturer would not and cannot alter such position. Arguing further, learned Solicitor General, contended that the interpretation of Explanation VIII as advanced by the Tribunal does not appear correct in law and fact. It was imperative that by using the registered logo "MERINO" belonging to M/s Merinoply and Chemicals Ltd. on their own products, the first respondent herein, M/s Emkay Investments Ltd. fulfilled the purpose of indicating a relation between the said products and the logo owner so as to influence the trade and, therefore, the provision of Explanation VIII were fully satisfied so far as the present case was concerned. Learned Solicitor General also submitted that the exception or exempting provision in taxing statute should be construed strictly and does not open to the Court or to the Tribunal to ignore conditions prescribed in the exemption Notification.

9. In support of his submissions, learned Solicitor General, relied on the following judgments:

1. B.H.E.L. Ancillary Association v. Collector of Central Excise, 1990 (49) ELT 33 (Mad.)

2. Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders, 2004 (93) ECC 540 (SC) : 2004 (165) ELT 481 (SC)

3. Commissioner of Central Excise, Chandigarh-I v. Mahaan Dairies, 2004 (93) ECC 657 (SC) : 2004 (166) ELT 23 (SC)

4. Commissioner of Central Excise, Chandigarh-II v. Bhalla Enterprises, 2004 (173) ELT 225 (SC)

10. Mr. Hari Shankar, learned counsel appearing for respondent No. 1 submitted that clause 7 read with Explanation VIII of the Notification does not make a registration or otherwise of the brand name or trade name, a relevant factor and that it is not sufficient to find a portion of the symbol or monogram of the other person on the product to oust them from the benefit of Notification or to bring the goods within the ambit of Explanation VIII. He would further argue that the Tribunal by a comparison of the markings found that the same are entirely different except the use of the word "MERINO" in between the respondents' own brand name and that the respondents' brand name "Pelican" has been clearly marked and their logo in the shape and style 'encircled Bird' has been put on the