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TMI Blog2025 (3) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. The Appellant was collecting Royalty charges from group companies, in terms of agreements, for grant of permission for usage of the logo "TTK" on their packaging, cartons, containers, labels, brochures, etc. in connection with the products manufactured, sold or distributed by them. The Department alleged that service tax was payable under Intellectual Property Rights Service, on the consideration received in the form of Royalty Charges, for temporary transfer of Intellectual Property Rights (IPR), as the logo "TTK" was used as a Trademark rather than as an artistic work as defined under Copy Rights Act, 1957 (CRA). The Appellant maintained that service tax was not payable on the said Royalty charges as the said logo was registered as an artistic work under the CRA and hence excluded from the scope of IPR service. Hence, the Department issued the following Show Cause-cum-Demand Notices as per the details tabulated below : - Sl.Nos. SCN/SOD No. & Date Period Involved Amount demanded (Rs.) Demanding provision Penalties proposed 1 SCN No.30/2009 Dt. 6.03.2009 7/2007 to 3/2008 1,06,42,829 Proviso to Sec 73(1) 76 & 78 2 SCN No.493/2009 Dt.13.10.2009 4/2008 to 3/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be given the benefit. iv. It was submitted that the impugned order had placed reliance on the decision in the case of M/s. Grasim Industries [2005 (185) ELT 123 (SC)], whereas the ratio in the case of M/s. Astra Pharmaceuticals (p) Ltd. [1995 (75) ELT 214 (SC)], under similar circumstances, is squarely applicable to the present issue. v. It was submitted that the impugned order was liable to be set aside as non est in law as the adjudicating authority ignored the ratio of the decisions cited by the Appellant. The Appellant placed reliance on the decisions in the case of Tarai Food Ltd. Vs. CCE, Meerut-II, M/s. Brown and Burk Pharmaceuticals Ltd. Vs. CCE, Chennai III [2007 (207) ELT 514 (Tri.-Chennai)] and M/s. Alfred Berg & Co. India Pvt. Ltd. Vs. CCE, Chennai [2007 (208) ELT 318 (Tri.-Chennai)]. vi. It was submitted that the 'ttk' logo only indicated the name of the group company or manufacturer and does not serve as an advertisement of a brand name or a trade name that the customer is likely to associate with a product on sale. It was pointed out that the Appellants have a registered copyright in the artistic work subsisting in the logo ttk and it is a fact that this was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his, the Department contends that the appellant was using the logo as a trademark recognized under the Trademark Act and that the appellants merely having registered the same under the Copyright Act would not make the logo not recognized as a trademark. It is also submitted by him that the logo does not have any artistic value and hence demand of service tax is sustainable. 9. We find that the logo `ttk' were only used to project the image of the manufacturer generally and did not establish any relationship between the mark and the products manufactured/ distributed by the group companies of the Appellant. It only is a house mark which is usually devised in the form of an emblem, word or both and it is for identification of the manufacturer/distributor. Therefore, this monograph which only identifies the manufacturer/distributor would not make the product patent or proprietary. The "House mark" is used generally as an emblem of the manufacturer/distributor projecting the image of the manufacturer, whereas "Brand name" is a name or trademark either unregistered or registered under the Act. Therefore, it is not necessary that "Brand name" should be compulsorily registered. A person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d some person having the right as proprietor to use the mark; and (ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark." Section 2(m)-"mark" includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof." "Definition of Copyright" "Section 14. Meaning of copyright -For the purposes of this Act, "copyright" means the exclusive right subject to do or authorise the doing of the provisions of this Act, to any of the following acts in respect of a work or any substantial part thereof, namely: - (a) in the case of a literary, dramatic or musical work, not being a computer programme,- (i) to reproduce the work in any material form including the sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plan), and engraving or a photograph, whether or not any such work possesses artistic quality; (ii) work of architecture; and (iii) any other work of artistic craftsmanship" 5.2 As seen above, the definition of IPR service excludes copyright. Undisputedly, the appellants have registered the logo 'ttk' under the Copyright Act. The department alleges that since they have referred the logo in their license agreement as a "trade name and also because the logo is used in relation to marketing and sale of goods, the same would be a trademark. The Ld. Consultant for the appellants has produced a copy of the registration of the logo under the Copyright Act. The appellants have obtained the registration of the logo in 1983. The clause and description of the work is noted in the Certificate as 'artistic work. The various products marketed and sold by the appellant as well as it's group companies/licensees would show that such products have distinct registered trademark and also uses the logo on the packets. For example: Levokast, Apiverin-M, Prestige etc., are the registered trademark. The packets also contained the logo. Such logo is used not only on the packets but al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, the logo is registered under the Copyright Act. Relevant portion of the decision in the case of ESPN Software India Pvt. Ltd. is reproduced as under: - "38. Product Licensing Agreement and Promotional Licensing Agreements were executed between TENA and TIPL TIIPL i.e. Appellant No. 2 executed sub-licensing agreements between TIIPL. and Bombay Dyeing and Manufacturing Co. Ltd., TIIPL and M/s. Brittania Industries and TIIPL and M/s. Bata India Ltd. In case of Bombay Dyeing agreement was made for sub-licensing the property "Powerful Girls" for use in home furnishing. In Schedule A sub-licensed properties were listed as PPG, Dexter Laboratory, Johny Bravo, Courage, Cow & Chicken, Codername Kids Next Door, CN Logo and all related Characters and Elements had been shown as Trademark of Cartoon Network. Similarly in case Brittania Industries sub-licensed property is Tom and Jerry for use on erasers, pencils and magnetic slap on a wrist bands for promotion of product of Brittania Industries. In Schedule A of Licensed Property and Trademark Notices of sub-licensing agreements PPG. Dexter's Laboratory, Johney Bravo, etc and all the related Characters and Elements are shown as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Trade and Merchandise Marks Act. Therefore, it would attract levy only if its container or packing carried any distinctive marks so as to establish the relation between the medicine and the manufacturer. But the identification of a medicine should not be equated with the produce mark. Identification is compulsory under the Drug Rules. Technically, it is known as 'house mark'. In Narayan's Book on Trade Marks and Passing Off, the distinction between 'house mark' 'and product mark (brand name) is brought out thus, 677A. House mark and product mark (or brand name). In the pharmaceutical business a distinction is made between a house mark and a product mark. The former is used on all the products of the manufacturer. It is usually a device in the form of an emblem, word or both. For each product a separate mark known as a product mark or a brand name is used which is invariably a word or a combination of a word and letter or numeral by which the product is identified and asked for. In respect of all products both the product mark and house mark will appear side by side on all the labels, cartons etc. Goods are ordered only by the product mark or brand name. The house mark serve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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