TMI Blog2004 (4) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... . Shri K.P.R. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and names, KALI , KALI MARK , BOVONTO , TRIO , SOLO , KALI COLA , FRUTANG and CAPTAIN . After the death (on 22-2-1964) of Shri P.V.S.K. Palaniappa Nadar, his eldest son Shri K.P. Rajendran became the karta of the family and the above brand names/trade marks were got registered in the name of Shri Rajendran qua karta of the family. The joint family business continued till 31-3-1977. From 1-4-1977, upon dissolution of the partnership, the manufacturing units at various places (Virudhunagar, Madras, Madurai, Karaikudi, Tirunelveli, etc.) each of which was known by the name Kali Aerated Water Works , were taken over and independently run by individual members of the joint family, with separate financial investments, machineries and other infrastructural facilities. However, all the units continued to use the above brand names/trade marks on their products. Shri K.P.R. Sakthivel, S/o Shri K.P. Rajendran was running the business at Madras. On 31-3-77, he was authorised to submit an application before 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 M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Duty arrears in respect of their clearances of goods up to 23-12-94 and started paying 50% of the Excise Duty payable thereafter. On their part, the department issued show cause notices to the respondents from time to time. 3. A Division Bench of the High Court disposed of the Writ Appeals on 27-6-2001 by a judgment, later reported in 2001 (132) E.L.T. 544 (Mad.). The relevant part of this judgement is reproduced below :- 5. It is the contention of the learned Counsel for the appellants that the Clause (4) of the said Notification can be made applicable only if the users of the same brand name manufacture the identical goods and not otherwise. We are of the opinion that this is a matter to be decided only by the adjudicating authority. As stated already, since the adjudicating authority had not decided this issue, it is for him to take up the issue after giving an opportunity to the appellants herein. On this short ground, we are of the opinion that the matter has to go back to the adjudicating 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 excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve legal right to use the said brand names/trade marks within the said area. The department is aggrieved by the orders passed by the appellate Commissioners. 5. Heard both sides. ld. SDR submitted that, in order to claim the benefit of Notification No. 1/93-C.E. (as amended), the assessees should have rebutted the Revenue s allegation that the goods cleared by them after affixing thereon the brand names which stood registered in the name of, and owned by, Shri K.P.R. Sakthivel (proprietor of the manufacturing unit at Madras) were not eligible for the benefit of SSI exemption under the Notification from 1-4-94 on account of the bar contained in para 4 thereof. They should have done this by showing that the brand names belonged to them. It was not in dispute that, during the relevant periods, the brand names/trade marks stood registered in the name of Shri K.P.R. Sakthivel and that other members of the family (respondents) were only permitted to affix them on their goods sold within their 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decree-holder. It did not confer ownership of the brand names/trade marks on the decree-holder. 7. Referring to the judgment of the High Court of Madras (Single Bench), dated 16-12-94 and the judgment of the Court (Division Bench), dated 27-6-2001, ld. SDR submitted that the judgment of the ld. Single Judge was set aside only for the purpose of remand of the case to the original authority for de novo decision on an issue which had not been addressed by the said authority. On the substantive issues including the question whether the goods cleared after 1-4-94 by the present respondents (Writ Petitioners) under the brand names/trade marks owned by Shri K.P.R. Sakthivel were hit by the exception in para 4 of Notification No. 1/93-C.E. (as amended), ld. Single Judge had recorded his own findings and these findings were not faulted by the Division Bench. In the circumstances, the reliance placed by the original authorities on the judgment passed by the ld. Single Judge was not 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 giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore the clearances of branded goods by Mamma Products were not affected by the exclusionary clause under the SSI Notification (8/99-C.E.). Reliance was also placed on the Supreme Court s judgment in Commissioner v. Bhalla Enterprises - 2004 (173) E.L.T. 225 (S.C.), wherein it was held that an assessee would also be entitled to the benefit of exemption under Notification No. 1/93-C.E. if the brand name belonged to the assessee himself although someone else might be equally entitled to that brand name. Ld. Counsel also endeavoured to distinguish the cases of Rukmani Pakkwell Traders (supra) and Mahaan Dairies (supra) cited by ld. SDR. Referring, again, to the subject Notification, ld. Counsel submitted that para 4 thereof contained an exception to exemption from payment of duty. Such an exception had to be strictly construed, ld. Counsel submitted, drawing support from The Construction of Statutes by Earl T. Crawford. Further, it was argued that the burden was on the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective territories. Accordingly, the respondents could use the brand names within their areas. A perusal of the DEED OF MUTUAL AGREEMENT shows that what was obtained by the respondents from Shri Sakthivel was only a permission to use the brand names within their respective territories. There is nothing in this agreement to indicate that the permission so given is irrevocable. One of the clauses of the agreement needs special mention and the same reads as under :- (xvi) If any party herein or their respective male lineal descendant acts in contravention to these agreed terms, then any party herein or in the absence of any party herein their male lineal descendants can initiate legal proceedings before the Courts of Law for declaration to declare that such party shall have no right to use the trade name/marks in future because of such contravention . Apparently, it was in terms of the above clause of the DEED OF MUTUAL AGREEMENT that Shri K.P.R. Dhanushkodi, proprietor 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), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents claim that the right to use the brand names/trade marks in his allotted area was assigned to him. The plea of co-ownership is no longer tenable inasmuch as, with the DEED OF MUTUAL AGREEMENT which authorised Shri K.P.R. Sakthivel to get the brand names registered in his own name and permit others (including the respondents) to use the brand names in their respective areas, the respondents relinquished their ownership, if any, in respect of the brand names. Had they wanted to be co-owners, they would have duly brought their names on the Registration Certificate issued by the Registrar of Trade Marks, for the material period. It is pertinent to note in this context that in the Registration Certificates covering the earlier part of the period 4-1997 to 3-1994, Shri K.P.R. Singaravel (one of the respondents) had held the brand names/trade marks jointly with Shri K.P.R. Sakthivel and some others. The cases of Malabar Fisheries (supra) and Sohanlal Others (supra) 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statute. In the instant case, the assessees goods were shown to be covered by the general provisions of Notification No. 1/93-C.E., but, then, the Revenue has been able to establish that the goods bearing the brand names of another person were covered by the exception laid down in para 4 of the Notification as amended with effect from 1-4-94. The Hon ble Supreme Court has held in the case of Mahaan Dairies (supra) that, in order to claim the benefit of a Notification, the party must strictly comply with the terms of the Notification and that if, on the wordings of the Notification, the benefit is not available, then, by stretching the words of the Notification or by adding words to the Notification, the benefit cannot be conferred. The court has held to the same effect in the case of Rukmani Pakkwell Traders (supra) also. In the case of K. Mohan Co. Exports (supra), the Hon ble Supreme Court had occasion to deal with an exemption Notification which granted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the periods of dispute, the brand names belonged to Shri K.P.R. Sakthivel. We have also considered the decisions in Mamma Products (supra) and Bhalla Enterprises (supra) cited by ld. Counsel and we find that none of these decisions can be applied to the facts of the present case inasmuch as in the instant case the respondents and Shri Sakthivel have not been shown to have jointly owned, or be equally entitled to, the brand names in question. 16. The judgment passed by the ld. Single Judge of the High Court in the writ petitions filed by the respondents held that the respondents were not entitled to the benefit of Notification 1/93-C.E. (as amended) as their goods were cleared under the brand names belonging to another person (Shri K.P.R. Sakthivel). Ld. Counsel has argued that nothing contained in this judgment could be relied on inasmuch as the said judgment was set aside by a Division Bench of the Court. We have already extracted the relevant portion of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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