Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of Central Excise vs Natco Pharma Ltd. on 25 November, 2004
Equivalent citations: 2005(180)ELT462(TRI-BANG)
ORDER S.L. Peeran, Member (J)
1. The Revenue is aggrieved with the OIA No. 3/2002, dated 22-3-2002 passed by the Commissioner of Central Excise (Appeals) by which he has upheld the assessee's contention that the goods manufactured by them by affixing their trade mark is classifiable under Chapter Heading 3003.10 and that the judgment rendered by the Apex Court in the case of Astra Pharmaceuticals (P) Ltd. v. CCE, Chandigarh - 1995 (75) E.L.T. 214 (S.C.) is distinguishable as that judgment pertain to the use of 'house mark' which had no connection with the goods cleared by the appellants. The findings recorded by the Commissioner in Paras 9 and 10 are reproduced below :
"9. I have examined the position. I find that it was at the instance of the Departmental Audit note issued vide V/30/752/93 Gr. XIV, dated 23-9-1993 that the goods in question carrying the Trade Mark of the respondents were classified under Chapter Sub-heading No. 3003.10. The classification lists (bearing Range Serial No. 47/93-94 effective from 1-9-1993 and bearing Range Serial No. 127/93-94 effective from 17-3-1994) were duly approved by the Department based upon the Audit view. Similarly the consolidated declaration, dated 12-5-1995 filed by the respondents under Rule 173B of the Central Excise Rules, 1944 classifying Ampicillin, Amoxycillin meant for export as P or P medicaments under Chapter Sub-heading No. 3003.10 was . duly acknowledged by the Superintendent on 12-5-1995.
M/s. Natco Pharma have acquired the Trade Mark 'Natco' following the change of the Company's name from M/s. Natco Fine Pharmaceuticals Ltd., to M/s. Natco Pharma Ltd., 'Natco' being a registered Trade Mark, any medicament which has on itself on its packing the Trade Mark Natco was rightly classified as P or P medicament under Chapter Sub-heading No. 3003.10. The Assistant Commissioner has rightly distinguished the decision in the case of Astra Pharmaceuticals reported in 1995 (75) E.L.T. 214 (S.C.) by holding that in their case the medicaments carried only the House Mark of the company and not a registered Trade Mark like in the case of the respondents. In the respondents case, the admitted position on record is that the trade mark itself has been affixed on all the containers of the Export products. Thus, a link between the products and Natco Pharma Ltd., has been established. The Assistant Commissioner also referred to Note (ii) in the Chapter Notes to Chapter 30 which states that P or P medicaments means any Drug or Medicinal preparation, in whatever form, which bears either on itself or on its container or both, a name which is not specified in a monograph, in a phamacopoeia, formulary or other publications or which is a brand name, that is, a name or registered mark under the Trade and Mechandise Marks Act, 1958 (43 of 1958) or any other mark such as symbol, monogram, label, signature, invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person, having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person.
10. The condition mentioned above is satisfied by the respondents since they were putting the registered Trade Mark on all the containers of their export products. Hence, the medicaments are rightly classifiable under Tariff Sub-heading No. 3003.10. The Assistant Commissioner also held that the same products like Ampicillin, Amoxycillin were being cleared to the domestic market, but without the Registered Trade Mark. Therefore, they were rightly classified as generic products under Tariff Sub-heading No. 3003.20. The Assistant Commissioner's order is correct both on facts and law. The appeal filed by the Department is not sustainable."
2. The learned SDR prays for setting aside the order. The Commissioner (Appeals) has wrongly applied the judgment of the Supreme Court. It is his contention that there is no connection between the brand name (Natco) and the goods manufactured by the appellants and, therefore, the ratio of the Apex Court judgment is not applicable to the facts of the case. He pointed out from the judgment that the 'house mark' had no connection or relationship with the mark and the medicine and hence, benefit has been given. He pointed out that the Respondent has registered the name "Natco" as trade mark in the goods but they had misled the facts by stating that the registered trade mark of the Company Natco was the brand name of the impugned goods while it was not so. He pointed out that it is only a house mark. He pointed out that the trade mark Natco is not exclusive to the impugned goods and hence it is classifiable only under sub-heading 3003.20 only as medicaments other than P or P.
3. The learned Counsel, on the other hand, submitted that the judgment of Astra Pharmaceuticals (P) Ltd. is clearly distinguishable as it pertains to the analysis of the terms "Any other Mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person". He pointed out that in terms of Note 2(ii) of Chapter 30 which defines "Patent or Proprietary medicaments", the items manufactured by the assessee is not reflected in any Pharmacopoeia Formulary or other publications mentioned therein or which is a brand name, that is, a name or a registered trade mark under the Trade and Merchandise Marks Act, 1958. It is his submission that once the trade mark has been registered under the said stated Act, they are excluded from sub-heading 3002.20 and the goods fall under Chapter sub-heading 3003.10 as Patent or Proprietary medicaments. He further pointed out that all the goods are exported and sales under bond also exported and hence the question of denying Modvat credit as in the present case does not arise in terms of Rule 13 of C.E. Rules read with Notification No. 48/94-C.E. (N.T.), dated 22-9-1994 and in terms of Rule 57AD of C.E. Rules. He also referred to the CBEC clarification given in their letter dated 8-11-2002 which has been extracted in the OIO No. 15-274/R-05/M-II/2001/53, dated 31-3-2004 passed by the Commissioner of Central Excise, Thane-II in a similar matter dropping the proceedings initiated by Show Cause Notice for denying the Modvat credil/Cenvat credit in similar situations.
4. We have carefully considered the submissions and note that the Astra Pharmaceuticals (P) Ltd. case relied by the Revenue is clearly distinguishable. It has dealt with the terms used in the definition of Note 2(ii) of Chapter 30 as extracted supra and was not dealing with the situation where the trade mark had been registered under the Trade and Merchandise Marks Act, 1958. The 'house mark' used in the goods of Astra Pharmaceuticals (P) Ltd. had no connection with the medicine and mere 'house mark' on them did not make the item under proprietary medicine. In the present case, the goods manufactured by the assessee are not in any of the Pharmacopoeia or other publications indicated in Note 2(ii) of Chapter 30. Once the goods have been affixed with a trade mark registered under the Trade and Merchandise Marks Act, 1958, then in terms of Note 2(ii) of Chapter 30, the goods are not to be considered as for classification under chapter sub-heading 3003.26. Chapter sub-heading 3003.10 refers to Patent or Proprietary Medicament, which bears a brand name that is, a name or a registered trade mark under the Trade and Merchandise Marks Act, 1958. The Commissioner has rightly distinguished the judgment of Astra Pharmaceuticals (P) Ltd. which dealt with the terms of Note 2(ii) of Chapter 30. The appellants have exported all the goods in terms of Rule 13 of the CE Rules and, therefore, they are eligible to avail Modvat credit in terms of Rule 57AD of the C.E. Rules, 1944 which clearly grants the benefit of Cenvat credit in respect of goods in terms of provisions of Rule 13. The Tribunal, in the case of Rathi Transpower Pvt. Ltd. and Anr. v. CCE, Pune 2003 (153) E.L.T. 59 (Tri.) = 2003 (55) RLT 615 (CEGAT - Mum.) has clearly laid down that once the brand name is registered in the appellants name in India, then it is to be treated as their brand name and the benefit of Notification 175/86-C.E., dated 1-3-1986 is extendable. However, the learned Counsel relied on this judgment. But, we are of the considered opinion that this ratio is not applicable as it did not deal with the terms of Note 2(ii) of the Chapter 30 which deals with the classification of Patent or Proprietary medicaments. In this appeal, the order passed by the Commissioner is just and proper. There is no merit in the appeal and the same is rejected.