TMI Blog1981 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... acts are almost similar. 2. M/s. Poona Bottling Co. Ltd., Petitioner No. 1 in this petition (C.W. 916 of 1978) is a public limited company carrying on, inter alia, the business of manufacturing and bottling of soft drinks i.e. Gold Spot, Limca, Thums up etc. None of its shares was held directly or indirectly, by M/s. Parle (Exports) Pvt. Ltd. (for short 'M/s. Parle' Petitioners No. 2, Ramesh Kumar More, is the Executive Director of Petitioner No. 1 Company. The factory of petitioner No. 1 is duly registered under the pactories Registration Act, 1948. The Petitioner Company has also obtained Central Excise licence under the Central Excises and Salt Act, for the purpose of manufacturing the said soft drinks, the petitioner-company has installed a bottling plant by an alleged investment of about Rs. 40 lacs. For manufacturing the soft drinks, it has to purchase numerous articles such as bottles, crown corks, sugar, citric acid etc. Besides these, it purchases essences from M/s. Parle under franchise agreements dated July 25, 1977 and February 27, 1978 (Annexure A Colly). The relevant terms of July 25, 1977 agreement read as under : "2. The Company hereby permits and authorises th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standard cases, cartons, bottles or crowns ………..will be used, except with the written permission of the company. Delivery trucks will be decorated in standard colours and according to approved designs. Emblem of Trade Marks should be exhibited prominently on the premises of the factory and office............ * * * * 9(b) Not at any time to manufacture, bottle, sell and deal in or otherwise be concerned with any product under any trade mark or other designation which is an initiation or infringement of the Trade Marks or is likely to cause passing of or any product which is calculated to lead the public to believe that it originates with the company because of the Bottler's association with the business of bottling, distributing and selling Beverages without in any way limiting the generality of the foregoing, it is hereby expressly understood and stipulated that use of the said Trade Mark in any form or fashion, or any word graphically or phonetically similar thereto or in limitation thereof on any product other than that of the Company would constitute an infringement of the Trade Mark or be likely to cause passing off. 9(c) During the continuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Marks at its sole cost and expenses. The Bottler will co-operate fully with the company in the defence and protection of the said Trade Marks and use in the territory infringing the company's Trade Marks. (15) The Bottler recognises the company's ownership of the said Trade Marks and will only use said Trade Marks in the manner lawfully permitted and will not take any action which will prejudice or harm the above Trade Marks or the company's ownership thereof in any way. No contracts will be made with sub-bottlers, agents, or distributors, or anyone having to do with the bottling or wholesale selling of products under the company's Trade Marks without the written permission of the company. (16) The Bottler will sell and distribute said beverages under company's Trade Marks and strictly on its own merits and make only such representation concerning said beverages as shall have been previously authorised in writing by the company. The bottler will not use 'the company's Trade Marks' as part of its name or any other drinks which are deceptively similar or can be confused with the beverages, nor will the bottler use in connection with any drink any Trade Marks or design which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturer from one or more factories during any financial year subsequent to 1977-78 and for such clearances not exceeding thirty-seven lakh bottles during the period commencing on July 4, 1977 and ending on March 31, 1978. Accordingly, the petitioner-company cleared the production up to thirty seven lakh bottles during the above-mentioned period at the reduced rate of duty of twenty-five per cent ad valorem. Under the Notification (Annexure 'C') the petitioner during the year 1977-78 were allegedly entitled to clear bottles of aerated waters at the lower rate of duty of twenty-five per cent up to clearances of fifty lakh bottles of aerated waters. 5. Some doubt appeared in the mind of the Central Government as to whether because of the franchise agreement between the petitioner-company and M/s. Parle, the petitioner-company, would be deemed to have been manufacturing the drinks for and on hehalf of M/s. Parle. The matter was referred to the Ministry of Law, Justice and Company Affairs, New Delhi, for its opinion. The said Ministry examined the matter and rendered an opinion that M/s. Parle could be treated as the manufacturer within the meaning of Section 2(f) of the Act (copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales-tax on the said purchases. The petitioner-company purchased various other articles. It had obtained independent release orders as actual users for importing citric acid. All the employees employed in the bottling plant were the employees of the petitioner-companies. M/s. Parle were only concerned with quality control of the product manufactured by the petitioner-companies in view of their permission to use their trade name on the bottles of aerated waters manufactured by the petitioner-companies. All sales were directly made by the petitioner-company and in such circumstances the petitioner-company was the manufacturer and it could not be urged that it was manufacturing the soft drinks for and on behalf of M/s. Parle. Special attention was pointed out towards clause 19 of the franchise agreement which specifically provided that the said agreement shall not create or be deemed to create any relationship of agency, partnership or joint venture between the petitioner-company and M/s. Parle. The decision of the Central Government, it was pleaded, was in complete violation of the principles of natural justice in as much as no opportunity of hearing was given. Respondent No. 3, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed a preliminary objection that the petition was premature in as much as only a show cause notice had been given. The decision was yet to be made by the concerned authorities. In case the decision was against the petitioners, remedies of appeal and revision were available and only after the decision of revision the petitioners could file a writ petition, if so advised. The contention of the petitioners that they could not get any relief from the Excise authorities was only a conjecture and presumption. The interpretation given by the Law Ministry was not binding on the quasi-judicial authorities who were required to examine the subject-matter on the basis of the record before them independently. On merits, the plea raised was that after examining the franchise agreements notice was served to show cause whether the manufacturing operations conducted by the petitioners in terms of the franchise agreement between them and M/s. Parle could be held to mean manufacture by themselves or for and on behalf of M/s. Parle as defined under the Central Excises and Salt Act, 1944. The terms of the franchise agreement made it clear that the petitioners had been bound for a period to conduct thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs have approached this court soon after the receipt of the show cause notices and they have not waited for the decision of the Assistant Collectors in this behalf. It is also true that under the relevant Act they had a right of appeal and revision. It is also a settled law that in appropriate cases the High Court may refuse to grant relief under Article 226 of the Constitution of India where there exists an alternative remedy, equally efficacious and adequate. However, the existence of an alternative remedy is not an absolute bar to the grant of relief under Article 226. It is just a circumstance which the court has to take into consideration on exercising its discretionary power under Article 226. This court would definitely grant relief under this Article if there is total lack of jurisdiction or complete non-application of mind. In our view, in the present cases there is total non-application of mind and, therefore, these are fit cases for granting of discretionary relief under Article 226 of the Constitution of India even though the remedies under the Act have not been exhausted. 11. On merits, the short question for consideration is whether the petitioners were manufacturer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrol over retail sale price, company's right of inspection, etc. All these terms relate to the safeguard of trade mark interests. In our view, these restrictions do not lead to the conclusion that the petitioners were manufacturing soft drinks for and on behalf of M/s. Parle or Modern Bakeries. The entire manufacturing activities are being carried on by the petitioners themselves. The soft drinks known as "Gold Spot", Limca, Thums-Up, Rimzim, '77' have acquired a specific popularity in the country. These are valuable trade marks and all the above-mentioned terms are to safeguard the interests regarding trade marks. It cannot be said that the petitioners were not the manufacturers or that they were manufacturing the soft drinks on behalf of M/s. Parle or Modern Bakeries. As a matter of fact, the Government itself has taken a similar view in reg. Surat Bottling Co. Ltd. (1980 ELT 353), (Order-in-Review No. 404 of 1980, dated 15-4-1980). There is one other aspect which we may mention. Under the Act the Excise duty is payable on manufacture by the manufacturer. If M/s. Parle are the manufacturer and its total manufacture is to be considered to deciding whether the exemption of 25% of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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