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Swastik Appliances Versus Commissioner of Central Excise, Mumbai-III

2015 (11) TMI 673 - CESTAT MUMBAI

Benefit of small scale exemption - Use of brand name of others - brand name registered in favor of others for different goods - Notification 8/2003 dated 01/03/2003 - Held that:- Appellant is using the brand/trade name for mixer grinder in class 7 while R.K.Fans and Allied Products for class 9 goods - appellant was using the brand name ‘Vipanchi’ on mixer grinder while their customer was using the same brand name on other products, does not help the cause of the appellant. - Goods were bearing b .....

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t is also noted that the fact that the symbol Veena continues to be used on the mixer grinder as also on the cartons could be found only during the visit of the officials at the premises of the appellant. Vital facts were suppressed and thus, in our view, this is appropriate case for invoking the extended period of limitation in subsequent notice. We, therefore, do not see any infirmity in invoking the extended period of limitation in subsequent notices.

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when the decisions of the Hon ble Supreme Court on the issue were available and there could have been no doubt whatsoever relating to the interpretation of the notification. - Decided against assessee. - APPEAL No. E/1274/2011; E/25/2012 & E/85356 & 88243/2013-Mum - Final Order Nos. A/1439-1442/2015/WZB/EB - Dated:- 28-5-2015 - Mr. P.K. Jain, Member (Technical) And Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri Mihir Mehta, Advocate For the Respondent : Shri V.K. Agrawal, Additiona .....

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nvestigations were carried out. Based upon the investigations, it came out that the appellant was manufacturing mixer grinder in the brand name of Vipanchi along with the logo of Veena. Further, the said brand name and logo belong to one M/s. R.K. Fans & Allied Products, Hyderabad. Investigation also revealed that the mixer grinder bearing the said name Vipanchi were being manufactured by the appellant on behalf of the said M/s. R.K. Fans & Allied Products, Hyderabad and after manu .....

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ame of Vipanchi . He further stated that the said brand name Vipanchi belongs to M/s. R.K. Fans & Allied Products, Hyderabad. In the statement he submitted that they have placed orders to the appellant for the manufacture of different models of mixer grinder and while placing the order, they have also forwarded a compact disc containing the details of their logo Vipanchi, design and the name which can be used whenever required. Shri Ramkishan also confirmed in his statement the uses of b .....

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them by M/s. R.K. Fans & Allied Products, Hyderabad. Based upon the investigation, it appeared that the goods manufactured and bearing the brand name Vipanchi along with its logo will not be entitled to the small scale exemption Notification No. 8/2003 dated 1.3.2003. Accordingly a demand notice was issued on 16.7.2007 covering the period September 2004 to March 2007. In spite of the said show cause notice, the appellant did not take the registration or started filing the returns. Another .....

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. Other show cause notices were adjudicated vide orders-in-original dated 31.1.2011, 25.5.2011, 31.12.2012. Appellant filed appeal against the four orders-in-original. In respect of the first order-in-original, the Commissioner (Appeals) decided the matter vide his order dated 23.7.2013. In respect of order-in-original dated 31.1.2011, the Commissioner (Appeals) decided vide his order dated 29.4.2011. Similarly, order dated 25.5.2011 was decided by order dated 27.9.2011 and the order-in-original .....

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them and the same was shown to Shri Amritlal Jain during a statement in February 2007 and he did not object to the said statement of Shri A. Ramkishan, however, after more than a year of receiving the first show cause notice at the time of personal hearing, the appellant produced a memorandum of understanding between him and Shri M. Krishna. The said memorandum of understanding is dated 10.6.2004 and on the basis of the said memorandum of understanding, the appellant claimed that the said brand .....

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how cause notices are for the period prior to obtaining the registration from the Trade Marks Registry while in respect of the third one, a part of the demand is for the period prior to taking the registration (7.10.2008) from the Trade Marks Registry and part of the period is thereafter. In fourth and fifth show cause notices, the period involved is after obtaining the registration from the Trade Marks Registry. In respect of the last three show cause notices, the ground taken by the Revenue is .....

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red post taking the registration would fall outside the scope of SSI Notification No.8/2003. 6. The learned counsel for the appellants main submission is that, as per the memorandum of understanding dated 10/06/2005, the brand Vipanchi has been assigned to the appellant in April, 2004 itself and in view of this position it is an incorrect assertion that the band-name Vipanchi belongs to M/s. R.K. Fans & Allied Products, Hyderabad. The brand-name actually belongs to the appellant in respec .....

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ri A Ramkishan. The learned counsel further relied upon the following case laws: Commissioner of Central Excise, Ahmedabad vs. Vikshara Trading & Invest Pvt. Ltd. 2003 (157) ELT 4 (SC); Commissioner of Central Excise vs. West Coast Diesel Ltd. 2000 (122) ELT 103 (Tri.Mum) and Gavas Laboratory vs. Commissioner of .Central Excise 2000 (122) ELT 516 (Tri.Del) wherein it was held that once there was an assignment in favour of another person and that fact was not in serious dispute; the mere fact .....

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appeal regarding the authenticity of memorandum of understanding and once the assignment of the trademark is not in dispute, the fact that the brand-name Vipanchi actually belonging to the appellant from April, 2004 onwards cannot be disputed. 6.1 The learned counsel submitted that it would be seen that the department had issued number of show cause notices invoking extended period. It is well settled principle that after the first show cause notice, in subsequent show cause notices, extended .....

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statement that the brand name Vipanchi belongs to them. Neither Shri Amritlal Jain or Shri M. Krishna had at any point of time, talked about the said memorandum of understanding. During investigation, what was claimed was that Shri M. Krishna, Director of M/s. R.K. Fans and Allied Products, Hyderabad, got the mixer grinder manufactured from the appellant in the brand name Vipanchi which belonged to M/s. R.K. Fans and Allied Products. It is also submitted that the so called as memorandum of .....

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g would indicate that this cannot even be considered as a deed of assignment. It is at the most an understanding about business deal between the two. The learned AR relied upon the Honble Supreme Courts judgment in the case of Meghraj Biscuits Industries Ltd. vs. Commissioner of Central Excise 2007 (210) ELT 161 (SC); this Tribunals judgment in the case of Vee Gee Faucets P. Ltd. vs. Commissioner of Central Excise 2010 (259) ELT 273; Swift Finvest Pvt. Ltd. vs. Commissioner of Central Excise .....

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bad. Since the said logo has not been registered in the name of the appellant, it cannot be said that after getting the registration, there is no case of Revenue. The brand name registered and that depicted on the goods are not the same. 7.2 The learned AR further submitted that the object of the Notification is to protect the small scale industries who are manufacturing the goods in their own brand name. The purpose of the exemption is not to permit manufacture in the name of others brand name .....

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iled quarterly and, therefore, the period of limitation has to be counted from such date. In view of this position, the show cause notice dated 26.6.2008 cannot be said to have been issued after the prescribed period of limitation. In any case the appellant did not take registration or file any returns during the period in question and hence the extended period of limitation in various show cause notices has been correctly invoked. 8. In rebuttal, the learned counsel submitted that the decision .....

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on certificate by the appellant are on the ground that the name of the marketing firm on the carton amounts to brand-name and picture of Veena is appearing on the carton as well as on the mixer. The learned counsel further submitted that the brand-name belongs to the appellant and writing the name of the marketing firm/or printing Veena on carton/mixer grinder will not disentitle the benefit of SSI Notification. He relied upon the following case laws in support of his contention that merely .....

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xcise 2002 (143) ELT 148 (Tri.-Del); (iv) Commissioner of Central Excise vs. Thio Pharma 2003 (151) ELT 84 (Tri.-Del.); (v) Emkay Investments Pvt. Ltd. vs. Commissioner of Central Excise 2000 (124) ELT 741 (Tri.-Cal.); (vi) CCE, Goa vs. Christine Hoden (I) Pvt. Ltd. reported in 1999 (113) ELT 591 (Tri.-Del.); (vii) Palsons Drugs & Chemical Industries vs. CCE, Calcutta-I reported in 1998 (98) ELT 665 (Tri.-Cal.), (viii) CCE, Mumbai vs. Ark Laboratories reported in 2005 (180) ELT (Tri.-Mum.). .....

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, Mumbai reported in 2006 (206) ELT 802 (Tri.-Mum.) and CCE, Goa vs. Premella Sanitary Products reported in 2005 (184) ELT 125 (SC). 9. We have considered the submissions made by both the sides. We note that the benefit of small scale exemption is vide Notification 8/2003 dated 01/03/2003. Para 4 of the said Notification, which is relevant present discussion, is as under: 4. The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whethe .....

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r 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; Thus in brief if a SSI unit manufactures specified goods bearing a brand/trade name of other person, benefit of SSI exemption is not available. 10. Before examining the applicability of the above mentioned Exemption Notification, the factual matrix emerging in the case is as under: .....

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y selling mixer grinder under his brand name Vipanchi along with logo and for this purpose he approached the appellant firm and ordered for manufacture of mixer grinders different models and these mixer grinders were to be manufactured by the appellant firm carrying the brand name Vipanchi along with the logo. The goods were supplied by the appellant at the agreed price. The artistic style of brand name and logo were provided by Shri A. Ramkishan and the appellant. From the statements record .....

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hange as far as indication of the brand name and logo on the mixer grinder as also on their carton is concerned. There are two factors that have come in between which are important. The first factor is the appellant after about 13 months of issuance of the show cause notice, during the personal hearing has produced copy of memorandum of understanding between Shri A. Ramkishan and Shri Amritlal Jain. Copy of the said memorandum of understanding is reproduced below for ready reference:- According .....

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han nor the present appellant talked anything about the said memorandum of understanding or the so called as deed of assignment. 10.1 We have gone through the said memorandum of understanding. At the outset, we note that the document produced is only a memorandum of understanding. It is not even an enforceable agreement, leave alone the deed of assignment. A plain reading of the said memorandum of understanding would indicate that the appellant has entered into a contract with Shri A. Ramkishan .....

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/individual name for which Shri A. Ramkishan does not have any objection. It is also seen that the memorandum of understanding is valid for five years and thereafter required to be renewed. In our opinion, the said memorandum of understanding which is not even notarized or registered and is not even an agreement, cannot be considered as a deed of assignment. It is at the most understanding between the appellant and Shri A. Ramkishan about the business model. 10.2 Another important development th .....

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actured and supplied after the registration of the above trade mark continue to bear the logo of Veena on the mixer grinder as also on the carton being supplied to Shri A. Ramkishan or his two firms. Another important factor to be noted is that as per the statement of Shri A. Ramkishan, the appellant can use the said brand name and logo only for the goods manufactured and supplied to him/his firms and not to anyone else. 10.3 Keeping in view the above factual matrix, in our opinion, that before .....

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R.K. Fans and Allied Products continued to be used on the mixer grinder as also on the cartons. In nutshell, all throughout the period, the goods were bearing the brand name Vipanchi as also the logo Veena which are understood by the customers/purchasers as the products of R.K. Fans and Allied Products/Vipanchi Marketing Pvt. Ltd. and the appellant was prohibited from selling the same goods to anyone else other than R.K. Fans and Allied Products or their marketing company. The various issues ra .....

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te the following:- 6. We have today delivered a Judgment in Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders - 2004 (165) E.L.T. 481 (S.C.) (Civil Appeal Nos. 3227-3228/1998) wherein we have held in respect of another Notification containing identical words that it makes no difference whether the goods 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 name or brand name of .....

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10.5 Second issue is that goods were bearing brand name Vipanchi along with logo of Veena belonging to R.K. Fans and Allied Products Ltd. while what is registered was Vipanchi . Further, the Hon ble Supreme Court in the case of CCE, Trichy vs. Rukmani Pakkwell Traders reported in 2004 (165) ELT 481 (SC), in para 7, has to state as under:- 7. The Tribunal had also held that under the Notification the use must be of such brand name. The Tribunal has held that the words such brand name shows th .....

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writing. This makes it very clear that even a use of part of a brand name or trade name, so long as it indicates a connection in the course of trade would be sufficient to disentitle the person from getting exemption under the Notification. In this case admittedly the brand name or trade name is the words ARR with the photograph of the founder of the group. Merely because the registered trade mark is not entirely reproduced does not take the Respondents out of Clause 4 and make them eligible to .....

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ither to protect the owners of the trade mark nor the consumers from being misled. These are considerations which are relevant in disputes arising out of infringement/passing of actions under the Trade Marks Act. The object of the notification is to grant benefits only to those industries which otherwise do not have the advantage of a brand name [See : para 3 ]. 12. Applying the ratio of the above judgment to the present case, it is clear that grant of registration certificate under the Trade Ma .....

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It was further held that the burden is on the assessee to satisfy the adjudicating authority that there was no such intention [See : paras 6 and 7]. 16. Lastly, we are required to examine the retrospective effect of the registration certificate dated 30-6-2000 with effect from 30-9-91. At the outset, we may reiterate that the object of the exemption notification was neither to protect the owners of the trade mark nor the consumers from being misled. These are considerations which are relevant in .....

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registration certificate applicable from retrospective date is based on the principle of deemed equivalence to public user of such mark. This deeming fiction cannot be extended to the Excise Law. It is confined to the provisions of the Trade Marks Act. In a given case like the present case where there is evidence with the Department of the trade mark being owned by M/s. Kay Aar Biscuits (P) Ltd. and where there is evidence of the appellants trading on the reputation of M/s. Kay Aar Biscuits (P) .....

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al in the case of Swift Finvest Pvt. Ltd. (supra), has discussed about the deed of assignment and para 14 and 15 of the said judgments which are relevant to the present case are reproduced below:- 14. At the outset it is to be noted that in a case where there is no dispute that the name used by the manufacturer for his product is a brand name of another person, taking resort to the explanation clause does not arise at all. Even otherwise, if we peruse the explanation clause, it lends no support .....

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t Ltd. for that purpose. 15. The right of the appellants to use the said brand name pursuant to the agreement between the parties cannot entitle the party to contend that it ceased to be the brand name of another person or that it would become an exclusive brand name of the manufacturer. The agreement between manufacturer and the owner of the brand name may entitle the manufacturer to use such brand name for his product without any objection from the owner of the brand name. But that by itself w .....

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roduct or not, the use of such brand name would disentitle the manufacturer of cement from claiming any benefit under the said notification. 11.2 This Tribunal had occasion to again examine similar issues in the case of Vee Gee Faucets P. Ltd. (supra). In the said case, this Tribunal in para 11 to 14, 16, 21 to 23, has observed as under:- 11. The notification explains the term brand name or trade name to mean a brand name or a trade name, whether registered or not, i.e. to say, the name or a .....

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er manufacturer or trader, such specified goods shall not, merely by reason of that fact be deemed to have been manufactured by such other manufacturer or trader. The Apex Court in Rukmani Pakkwell Traders case held that the explanation to clause 4 of the Notification No. 1/93-C.E. provides that the exemption contained in the notification would not apply to specified goods bearing a brand name or trade name registered or not of another person. Referring to Explanation IX to the said notification .....

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n of the identity of that person, it was held that the said explanation makes it clear that the brand name or trade name shall mean a brand name or trade name whether registered or not of another person that is to say a name or a mark, code number, design number, drawing number, symbol, monogram, label, signature or invented work or writing and same makes it further clear that even a use of part of a brand name or a trade name, so long as it indicates a connection in the course of the trade woul .....

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held that even if the goods are different so long as the trade name or brand name of some other Company is used, the benefit of the Notification would not be available and further, 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 Notification. 13. In Bhalla Enterprises case while observing that there was no reason to differ from the reasoning in the earlier decisions in Rukhmani Pakkwell Traders and Mahaan Dairies c .....

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rson. There is no requirement for the owner of the trade mark should use the name or mark with reference to any particular product. The object of the exemption notification was neither to protect the owners of the trade mark/trade name nor the consumers from being misled. These are considerations which are relevant in cases relating to disputes arising out of trade mark infringement or passing off actions under the Trade Marks Act. The object of the Notification under the Excise Act is clearly t .....

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ined the word brand name and trade name as under : Explanation IX - 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 .....

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cludes the benefit thereunder in cases where the goods carry a brand name or trade name, merely because there is some arrangement either in the form of contract between the parties giving consent for use of such brand name or trade name by person other than the proprietor thereof cannot result in nullifying the mandatory condition imposed and incorporated in such notification in order to enable the manufacturer to avail the benefit thereunder. It is well settled law that the exemption notificati .....

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of consent of the proprietor of such brand name or trade name. Neither it discloses that assignment of right in relation to brand name or trade name by the proprietor thereof in favour of manufacturer of goods would exclude such manufacturer from the exclusion clause in the notification. It is well established that the product which carries the brand name or trade name whether registered or not of another person, such product would be non-eligible to claim the benefit under the notification. Tha .....

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does not disclose the appellants to be the exclusive owner of the brand name or trade name, rather it discloses that the appellant to be subsequent proprietor and that too on the basis of assignment deed. In the absence of the appellant being exclusive proprietor of the brand name and trade name and there is a clear admission that M/s. United Cocks Pvt. Ltd. were the original owners, use of the brand name GURU by the appellant would continue to be a use of a brand name of another person. Being .....

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gistration in the manner and the circumstances it had been granted, has at all resulted in creating the brand name to be the exclusive property of the appellants. 11.3 We find the appellant has quoted catena of judgments. However, we observe that all these judgments are for period prior to the judgments of the Honble Supreme Court mentioned earlier and the Honble Supreme Court has laid down the law and interpreted the intention of the notification and in view of the said position, we do not co .....

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