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TMI Blog2005 (4) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sakthivel, Kali Aerated Water Works, Chennai attracted the bar created in para 4 of the above Notification as amended by Notification No. 59/94-C.E. The amounts of duty mentioned in the 3rd column of the table given below are sought to be recovered for the periods mentioned in the 4th column thereof from the assessees named in the 5th column. The persons named in the last column of the table who are the respondents herein had obtained the respective manufacturing units mentioned in the 5th column, in terms of a DEED OF MUTUAL AGREEMENT dated 12-3-1993 entered into between 10 coparceners (including the respondents) of an erstwhile Hindu Undivided Family (HUF) and were independently running the business of manufacture and sale of aerated waters, etc. in their respective territories during the respective periods :- 1. 2. 3. 4. 5. 6. Appeal No. O-I-A Amount Period Unit's Name Proprietor (S/Shri) E/454/2002 130/2002 dt. 8-7-2002 Rs. 6,92,485/- 12-5-94 to 19-12-94 Kali Aerated Water Works, Madurai-I Division K.P.R. Dhanushkodi E/455/2002 131/2002 dt. 8-7-2002 Rs. 61,81,832/- 11-96 to 5-2001 Kali Aerated Water Works, Madurai-I Division -do- E/456/2002 132/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Registrar of Trade Marks to get the above brand names/trade marks registered afresh. Accordingly, Shri K.P.R. Sakthivel obtained a Registration Certificate from the Trade Mark Registry. In April, 1992, there was a partition of immovable properties among members of the family. This was followed, in 1993, by execution of a "Deed of Mutual Agreement" relating to use of trade marks. In terms of the DEED OF MUTUAL AGREEMENT dated 12-3-93, Shri K.P.R. Sakthivel permitted other members of the family to use the brand names/trade marks in their respective areas. Thus Shri K.P.R. Dhanushkodi, who was running the business at Madurai, could use the brand names/trade marks in the marketing area allotted to him under the above agreement dated 12-3-93. The other respondents also could use the brand names/trade marks in their respective territories. All the respondents were individually availing exemption under Notification No. l/93-C.E., dated 28-2-93 also. A dispute arose between the respondents and the department with the amendment of Notification No. 1/93-C.E. by Notification No. 59/94-C.E., dated 1-3-94. This amending Notification inserted a new paragraph w.e.f. 1-4-94 in Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority the Assistant Collector of Customs to determine the classification of the goods manufactured by the appellants as well as their claim regarding the exemption of excise duty. 6. Though the learned Single Judge had decided the issue on merits, and had given a finding, since the adjudicating authority had not applied his mind, and decided the question, and also we having found the matter has to go back to the adjudicating authority for proper consideration as to the disputed question of facts, it is necessary that the findings of the learned Single Judge on this aspect alone have to be set aside. 7. Accordingly, the findings of the learned Single Judge in this regard on merits of the claim of the appellants are vacated. The appeals are ordered accordingly and the matter is remitted back to the Assistant Collector of Customs for the purpose of proceeding with the adjudication process afresh." 4. Pursuant to the above judgment, the original authorities having jurisdiction over the assessees took up the respective SCNs for adjudication. After due process of law, the adjudicating authorities held that the clearances of branded goods in question were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir respective territories. This position was clear from the terms of the DEED OF MUTUAL AGREEMENT dated 12-3-93. There was nothing in that agreement to indicate that the respondents shared with Shri Sakthivel the ownership of the brand names/trade marks. Thus, according to ld. SDR the brand names/trade marks indisputably belonged to Shri K.P.R. Sakthivel who was covered by the expression "another person" used in para 4 of the Notification (as amended). It was argued that on the wordings of para 4 of the Notification (as amended), the benefit of exemption under the Notification was not available to the branded goods cleared by any of the respondents. Para 4 ibid was in the nature of an exception which required to be strictly construed. To buttress the point, the ld. SDR referred to the Supreme Court's judgments in Rukmani Pakkwell Traders - 2004 (165) E.L.T. 481 (S.C.) and Commissioner v. Mahana Dairies - 2004 (166) E.L.T. 23 (S.C.). She also relied on the Tribunal's decision in Kores India Ltd. v. Commissioner - 2003 (158) E.L.T. 658 (Tri. - Del.), wherein, after finding that there was no proof of the brand name "ECONOPRINT" of M/s. Kores India Ltd. having been assigned to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inappropriate. 8. Referring to the affidavits filed by the respondents in the High Court, ld. SDR pointed out that the respondents themselves were of the view that, if para 4 of the Notification was given effect to, they would be liable to pay Duty of Excise on the branded goods cleared by them after 1-4-94. 9. On behalf of the respondents, Shri C. Natarajan, Senior Advocate referred extensively to the provisions of the DEED OF MUTUAL AGREEMENT and submitted that, by virtue of the said agreement, all the respondents were co-owners of the brand names and each of them was entitled to use the brand names in his own territory to the exclusion of all others. Shri K.P.R. Sakthivel, in whose name the brand names stood registered, was not entitled to exclusive use thereof for all the areas covered by the agreement. He could use the brand names only within the territory allotted to him under the DEED OF MUTUAL AGREEMENT. He could not be held to be the sole owner of the brand names. Therefore, according to ld. counsel, the respondents doing business in other areas could not be denied the benefit of SSI exemption in respect of their goods cleared under the said brand names, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue to show that the goods in question were covered by the exception engrafted in para 4 ibid. In this connection, reference was made to the Supreme Court's judgment in Collector v. K. Mohan & Co. Exports - 1989 (43) E.L.T. 811 (S.C.). Ld. Counsel claimed that, in the instant case, the Revenue had not succeeded in establishing that the goods cleared by the respondents during the relevant periods attracted para 4 of the Notification. 11. Referring to the judgment passed by the ld. Single Judge of the High Court in the Writ Petitions of the respondents and others, ld. Counsel expressed the view that nothing contained in the said judgment could be relied on in the instant case as the judgment was set aside by a Division Bench of the Court. 12. We have carefully considered the submissions. There is no dispute of any of the facts constituting the family business history of the respondents. With the death of Shri P.V.S.K. Palaniappa Nadar, the surviving male members of the family constituted a new partnership in 1964 in the name and style of Kali Aerated Water Works with its Head office at Virudhunagar and branches at Madurai, Tirunelveli, Karaikudu, Madras, Kumbakonam an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prietor of M/s. Kali Aerated Water Works, Madurai filed a suit in the Court of Additional District Munsif, Madurai against S/Shri K.P.R. Sakthivel (Chennai) (1st defendant), K.P.R. Singaravel (Erode) (3rd defendant), K.P.R. Nageswaran (Karaikudi) (4th defendant) , K.P.D. Rajendran (Tirunelveli) (5th defendant), K.P.D. Sureshkumar (Salem) (7th defendant) and K.P.D. Prem Kumar (Virudhunagar) (8th defendant) and others for a decree of declaration and injunction. The reliefs prayed for in the said suit (OS No. 578 of 1994) were in respect of the right to use the brand names within the places allotted to the plaintiff in the DEED OF MUTUAL AGREEMENT dt. 12-3-93. The Civil Court, on 26-3-96, granted decree to the plaintiff, Shri K.P.R. Dhanushkodi declaring his exclusive right to use the brand names within the allotted territory and restraining the defendants (the present respondents, Shri K.P.R. Sakthivel and others), by permanent injunction, from interfering with the said right of the plaintiff. This was a compromise decree. Accordingly, Shri K.P.R. Dhanushkodi could exclusively use the brand names within his territory without being interfered with by Shri K.P.R. Sakthivel and others. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) wherein, unlike the present respondents, erstwhile co-parceners of Hindu joint families claimed co-ownership of properties - capital assets in the former case and trade marks in the latter - and resorted to legal remedies to attain the benefit of such right upon dissolution of the joint family partnerships and never did anything in the nature of relinquishment of the right, are of no support to the respondents in the present appeals. In the circumstances, for the periods of dispute, the brand names can only be considered as belonging to Shri K.P.R. Sakthivel in whose name they stand registered for the purpose of use on aerated waters and other non-alcoholic beverages and drinks covering entire Tamil Nadu. In this view of the matter, each of the respondents was clearing his goods under brand names belonging to 'another person' (Shri K.P.R. Sakthivel) and such clearances attracted the exception under para 4 of Notification No. 1/93-C.E. (as amended). 14. Both sides have stated that an 'exception' has to be strictly construed. Notification No. 1/93-C.E. exempted specified goods manufactured by a small-scale industrial unit from payment of duty, but para 4 thereof inserted w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption from payment of duty to all excisable goods other than those specified in the Table annexed to the Notification and it was held that the onus of showing that the goods were covered by the exclusion was on the department. There is no controversy about this legal position either. The question is whether the department has succeeded in this case to show that the branded goods cleared by the respondents during the relevant periods attracted para 4 of Notification No. 1/93-C.E. (as amended). We have already found that the Revenue has succeeded in discharging this burden. 15. The Revenue has relied on the Tribunal's decision in the case of Kores India Ltd. (supra). In that case, the issue related to denial of SSI exemption to M/s. Econoprints Stencils Pvt. Ltd. (ESPL, for short) on the ground that the goods manufactured and cleared by them was bearing the brand name "ECONOPRINT" belonging to M/s. Kores India Ltd. A report of the Examiner of Trade Marks showed that M/s. Kores India Ltd. continued to be the proprietor of the brand name. Even M/s. ESPL admitted that the brand name was owned by M/s. Kores India Ltd. They could not produce any proof to show that the brand name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Division Bench judgment vide para 3 of this order. Their lordships were remanding the cases to the adjudicating authorities, upon finding that those authorities had not decided on the issue whether para 4 of Notification 1/93-C.E. (as amended) was applicable only if different users of the brand name used it on identical goods. The remand order accordingly required the adjudicating authorities to determine the classification of the goods manufactured by the writ-appellants, i.e. to ascertain as to whether they were manufacturing identical goods or not. But the Hon'ble Supreme Court has since held vide para 6 of Rukmani Pakkwell Traders (supra) and para 6 of Mahaan Dairies (supra) that even if the goods are different, so long as the trade name or brand name of another person is used, the benefit of SSI exemption would not be available. In any case, the fact remains that the findings recorded in relation to applicability of para 4 of Notification 1/93-C.E. (as amended) to the goods in question, by ld. Single Judge of the High Court were not interfered with by the Division Bench. Hence we do not think that those findings have no persuasive effect, it was rightly held by the ld. Sing ..... 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