Custom, Excise & Service Tax Tribunal
Shri Ashok Kumar Gupta, Authorised ... vs C.C.E., Kanpur on 9 July, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CIRCUIT BENCH AT ALLAHABAD Date of hearing/decision: 9.7.2015 Excise Appeal Nos. 3509-3511 of 2006 and 3474 of 2006 (Arising out of the Order-in-Original No. 19/Commissioner/MP/2006 dated 31/07/06 passed by the Commissioner Central Excise, Kanpur). For approval and signature: Honble Mr. Justice G. Raghuram, President Honble Mr. H.K. Thakur, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? M/s Parag Enterprises ] Shri Ashok Kumar Gupta, Authorised Signatory ] . Appellants Shri Rajesh Sisodia, Ex-Authorised Signatory ] vs. C.C.E., Kanpur .... Respondent
and vice-versa Appearance:
Shri Anurag Kapur, Advocate - for the appellants/Respondent Shri R.K. Mishra, A.R. for the Respondent/appellant Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. H.K. Thakur, Technical Member Final Order No. 52206-52209/2015 dated 09/07/2015 Per. H.K. Thakur :-
Appeal No. 3474/2006 has been filed by the Revenue for setting aside OIA No. 319-CE/APPL/KNP/2006 dated 26/7/2006 under which First Appellate Authority has allowed the appeal filed by M/s Parag Enterprises (respondent in appeal No. E/3474/2006). Appeal No. E/3509/2006 has been filed by the main appellant M/s Parag Enterprises against OIO No. 19/Commissioner/MP/2006 dated 31/7/06 under which Adjudicating Authority has confirmed a demand of Rs. 30,40,894/-, alongwith interest, and also imposed equivalent penalty under Section 11AC of the Central Excise Act, 1944 readwith Rule 25 of Central Excise Rules, 2002, Rule 25 of Central Excise Rules, 2001 and Rule 173Q of the Erstwhile Central Excise Rules, 1944. Penalties of Rs. 1 lakh each have been imposed upon Shri Ashok Kumar Gupta, Authorised Signatory of the main appellant and Shri Rajesh Sisodia, Ex-Authorised Signatory of the main appellant, for which appeals No. E/3510/2006 and E/3511/206 respectively have been filed.
2. Shri Anurag Kapur (Advocate), appearing on behalf of M/s Parag Enterprises and others, argued that his clients are manufacturing Liquid Shoe Finish and Liquid Shoe Polish bearing a brand name TEGU, which is the brand name of M/s TEGU Chemische Fabrik Theysohn, Germany. That officers visiting the factory on 13/1/2005 seized finished goods, bearing brand name TEGU, worth Rs. 5,04,762/- on the grounds that his clients are not eligible for exemption under Notification No. 8/2003-CE dated 01/3/2003 for clearing branded goods of another person. That seized goods were confiscated by the Adjudicating Authority under OIO No. 129-AC/Adj./2005 dated 28/12/05 and penalties were also imposed. That option to redeem the goods was also extended to the main appellant. That on an appeal First Appellate Authority allowed their appeal under OIA No. 319-CE/APPL/KNP/2006 dated 26/7/06 on the grounds that by virtue of certificate No. A-74196/2005 dated 12/9/2005 issued by Registrar of Copyright, appellant was eligible for exemption. That M/s TEGU Chemische Fabrik Theysohn, Germany has also certified that TEGU is not a registered trade mark of their company.
2.1 Learned (Advocate) further argued that after detailed investigation another show cause notice dated 02/5/2006, followed by Corrigendum dated 04/7/2006, was also issued on the same issue to the main appellant and others demanding duty of Rs. 30,40,894/- for the period 2001-2002 to 2005-2006 which was adjudicated by Commissioner, Central Excise and Customs, Kanpur under OIO No. 19/Commr/MP/2006 dated 31/7/2006 which is appealed against by the appellants. It is the case of the learned Advocate that on an application (registered as Trade Mark No. 695047 dated 19/1/1996), Trade Marks Registry, Government of India, Mumbai has registered trade mark TEGU in the name of Parag Enterprises, Agra. That as the application was made in 1996, therefore, his clients were legally owning the brand name TEGU right from 1996. It was thus Advocates case that exemption was rightly available to his clients. Learned Advocate also relied upon the following case laws to argue that certificate dated 23/12/2005 will be effective from 19/1/1996 and on the same issue appeals have been allowed in favour of assessees :-
(i) Whale Stationary Products Ltd. vs. CCE, Meerut reported in 2004 (168) E.L.T. 405 (Tri. Del.) ;
(ii) Laxmi Industries vs. CCE, Rajkot reported in 2013 (298) E.L.T. 435 (Tri. Ahmd.) ;
(iii) Northern India Tiles Corporation vs. CCE, Delhi II reported in 2013 (293) E.L.T. 372 (tri. Del.) ;
(iv) CCE, Mumbai vs. Bigen Industries Ltd. reported in 2006 (197) E.L.T. 305 (S.C.) ;
(v) Himachal Wireless Ltd. vs. CCE, Chandigarh reported in 2010 (262) E.L.T. 619 (Tri. Del.) ;
(vi) Reiz Electronics Pvt. Ltd. vs. CCE, Delhi II reported in 2007 (211) E.L.T. 475 (Tri. Del.) ;
(vii) Collector of Central Excise, Calcutta I vs. ESBI Transmission Private Limited reported in 1997 (91) E.L.T. 292 (Cal.) ;
(viii) Rathi Power Pvt. Ltd. vs. CCE, Pune reported in 2003 (153) E.L.T. 59 (Tri. Mum.) ;
(ix) Bothara Agro Equipments Pvt. Ltd. vs. CCE, Aurangabad reported in 2007 (214) E.L.T. 121 (Tri. Mum.) ; and
(x) ESBI Transmission Pvt. Ltd. vs. CCE reported in 1997 (91) E.L.T. 47 (Cal.).
3. Shri R.K. Mishra, learned AR appearing on behalf of the Revenue argued that both the Adjudicating Authorities have held that certificate dated 23/12/2005 issued Trade Marks Registry is for artistic work and not a transfer of brand name. That there is no agreement between the appellant and the Germany Company regarding use of brand name in India. That even if appellant got the brand name registered in India still they will not be eligible for Small Scale exemption under Notification No. 8/2003-CE dated 01/3/2003. That Larger Bench of CESTAT in the case of M/s Namtech Systems Ltd. vs. CCE, New Delhi [2005 (115) E.L.T. 238 (Tribunal)] has held that Small Scale exemption under Notification No. 175/86-CE dated 01/3/1986 is not eligible if a manufacturer affixes a brand name of a foreign person on the manufactured goods. Learned AR also relied upon the case law of CCE, Trichy vs. Rukmani Pakkwell Traders [2004 (165) E.L.T. 481 (S.C.)] in support of his arguments.
4. Heard both sides and perused the case records. The issue involved in these proceedings is whether brand name TEGU, registered in the name of the appellant in India, is not sufficient to claim exemption of Notification No. 8/2003-CE dated 01/3/2003 when the same belongs to a German company. Learned AR has relied upon the case law of CCE, Trichy vs. Rukmani Pakkwell Traders (supra). It is observed from para 5 of this judgment delivered by the Apex court that respondent Rukmani Pakkwell Traders was not the joint owner of the Trade Mark ARR at all. In the case before us appellant M/s Parag Enterprises is the registered owner of the Trade Mark TEGU in India.
4.1 From the case laws relied upon by the appellant it is settled legal proposition that the date of registration of the trade marks goes back to the date of application, which is 19/1/1996 in the proceedings before us.
4.2 On the issue of admissibility of Small Scale exemption to registered owner of a brand name in India it is observed that the same is no more res-integra. Honble Calcutta High Court in the case of ESBI Transmission Private Ltd. vs. CCE [1997 (91) E.L.T. 47 (Cal.)] held as follows with respect to paragraph 7 of small scale exemption Notification No. 175/86-CE dated 01/3/1986 :-
9. The main charge in the show cause notice is that? M/s. ESBI Transmissions Pvt. Ltd., 8, Camac Street, Calcutta-17 have established themselves as designers and manufacturers in India for producing VULCAN diaphragm couplings (flexible) with their own designs and rights for supplying the said couplings in this country in the industrial application field. In this context, the said foreign company have not objected against the use of their Trade name mark VULCAN on these diaphragm couplings (flexible) manufactured indigenously and cleared by the assessee, so much so that the said company `VULCAN has been got registered by M/s. ESBI Transmissions Pvt. Ltd., 8, Camac Street, Calcutta-700017, under the Trade & Merchandise Marks Act, 1958 (43 of 1958) and the use of the name `VULCAN/VULCAN-type couplings, by virtue of an assignment and thus, the exclusive right to manufacture, sell offer for sale, supply and/or distribution of VULCAN/VULCAN-type couplings and spares by any other firm in India other than the assessee, is illegal. In this connection it is stated that `M/s. VULCAN COUPLINGS are established designers and manufacturers in Germany for `VULCAN COUPLINGS and selling the same all over the World especially in the Marine applications field. Now Para 7, the Notification No. 175/86-C.E., dated 1-3-1986, as amended states, inter alia, the exemption contained in this notification shall not apply to the specified goods with a brand name or trade name (registered or not) or another person who is not eligible for the grant of exemption under this notification. Since `VULCAN COUPLINGS of Germany are not entitled to SSI benefits by virtue of being a foreign company, hence the benefit of Notification No. 175/86-C.E. would not be available to M/s. ESBI Transmissions Pvt. Ltd., in respect of the diaphragm couplings (flexible) in question affixed with the brand/Trade name `VULCAN of a foreign manufacturers and hence the said goods attract full effective rate of duty at 20% ad valorem (Basic) Plus 10% special on basic.
10. There is no dispute that the petitioner had? availed of the benefit of the Notification No. 175/86-C.E., dated 1-3-1986 as amended from time to time by virtue of the fact that the petitioner is a small scale unit. It was allowed the benefit of the exemption given in that notification. The case of the respondents is that the petitioner is not entitled to this exemption, because Clause 7 of the Notification provides :-
7. The exemption contained in this notification shall not apply? to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification.
11. It has been contended on behalf of the? respondents that the said foreign company has not objected to the use of their Trade name mark `Vulcan which has been registered by M/s. ESBI Transmissions Pvt. Ltd., 9, Camac Street, Calcutta-17 under the Trade & Merchandise Marks Act, 1958 (43 of 1958). The use of the name `VULCAN/VULCAN-type couplings and spares by any other firm in India other than the assessee has become illegal. In this connection it is stated that M/s. Vulcan Couplings are established designers and manufacturers in Germany for `Vulcan Couplings and are selling the same all over the World, especially in the Marine applications field. Now Para 7 of the Notification No. 175/86-C.E., dated 1-3-1986, as amended states, inter alia, that the exemption contained in this notification shall not apply to the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification. Since `Vulcan Couplings of Germany are not entitled to SSI benefits by virtue of being a foreign company, hence the benefit of Notification No. 175/86-C.E. would not available to M/s. ESBI Transmissions Pvt. Ltd., in respect of the diaphragm couplings (flexible) in question affixed with the brand/Trade name `Vulcan of a foreign manufacturer and hence the said goods attract full effective rate of duty at 20% ad valorem (Basic) plus 10% special on basic (now 15%).
12. It appears that the respondents have issued the? show cause notice on the basis of a wrong assumption of law and fact. The exemption under the aforesaid notification could be taken away only if it is found that the petitioner as a manufacturer had affixed the specified goods with a brand name or trade name (registered or not) of another person who was not eligible for the grant of exemption under the aforesaid notification. It has been rightly contended on behalf of the petitioner that the petitioner has used a brand name of its own and of which it is the registered owner. In such a situation the provisions of Clause 7 of the aforesaid notification will not apply to the case of the petitioner.
13. In my judgment the contention made on behalf of? the petitioner must be upheld.
14. The petitioner is the owner of the registered? trade mark Vulcan. By virtue of the provisions of Section 28 of the Trade & Merchandise Act the petitioner has acquired an exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered. The petitioner is entitled to obtain relief against any person in respect of infringement of the trade mark in the manner provided by the Trade & Merchandise Marks Act. Therefore, no other person apart from the petitioner is entitled to use this trade mark. There is no question of there being any other person having any right to the trade mark in respect of these products. In view of this position in law it is not open to the respondents to contend that the petitioner was using the brand name or trade name registered or otherwise of some other person. The petitioner was using its own registered brand name or trade name Vulcan. By virtue of the provisions of Section 28 of the Trade & Merchandise Marks Act, 1958 the petitioner acquired the exclusive right to use the trade name Vulcan. Therefore, no other manufacturers including the German firm could use the trade name Vulcan in India without the consent of the petitioner. It is not the case of the respondents that apart from the petitioner any other person is manufacturing and selling these products under the trade name Vulcan in India. But the allegation is that there is a German firm which also uses the trade mark Vulcan. The petitioner has not denied this allegation. In fact, the petitioner admits that it has been authorised by the German firm to use the trade mark Vulcan in India. The petitioner has been permitted to use this trade mark as an owner thereof. He has applied and obtained registration of this trade mark in his own name. So far as India is concerned the trade mark belongs to the petitioner. The Central Excise Act is applicable throughout the territory of India only. The petitioner is using its own trade mark in India and not of somebody else. Therefore, the allegation that the petitioner is using somebody elses trade mark militates against the provisions of the Trade & Merchandise Act, 1958 which are applicable throughout the territory of India.
5. The ratio laid by Honble Calcutta High Court in the above case law with respect to Notification No. 175/86-CE dated 01/3/1986, is squarely applicable to the similarly worded provisions under Notification No. 8/2003-CE dated 01/3/2003. Accordingly appeals filed by the appellants are allowed and appeal filed by Revenue is dismissed leaving both sides to bear their own costs.
(Operative part of the order pronounced in the open court.) andl (Justice G. Raghuram) President (H.K. Thakur) Technical Member PK ??
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