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1988 Supreme(Mad) 292
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S A KADER
Sri Pillaiyar Soda Factory - Appellant
Versus
Union of India and Others - Respondent
Case No : W.P. No. 12711 to 12716 of 1987
Decided On : 29 July 1988
The use of similar trade marks or brand names does not constitute 'common trade mark aerated waters' under Notification No. 148/82-C.E., dated 22.4.1982, and manufacturers using different trade marks or brand names are entitled to the exemption under the notification.
Headnote:
CENTRAL EXCISE - NOTIFICATION NO. 148/82-C.E., DATED 22.4.1982 - EXEMPTION FROM DUTY - COMMON TRADE MARK AERATED WATERS - INTERPRETATION - SIMILAR TRADE MARKS OR BRAND NAMES - NOT COVERED - PETITIONERS ENTITLED TO EXEMPTION.
Fact of the Case:
Six petitioners, engaged in the manufacture and sale of aerated waters, challenged the order of the Collector of Central Excise, Madurai, which denied them exemption from duty under Notification No. 148/82-C.E., dated 22.4.1982, on the grounds that they were using common trade marks or brand names. The petitioners contended that their trade marks or brand names were not identical or deceptively similar to each other and that they were entitled to the exemption.
Finding of the Court:
The court held that the petitioners' trade marks or brand names were not identical or deceptively similar to each other and that they were entitled to the exemption under Notification No. 148/82-C.E., dated 22.4.1982. The court found that the Collector of Central Excise had misinterpreted the notification and had failed to correctly interpret the scope of the explanation to the notification.
Issues: 1. Whether the petitioners' trade marks or brand names were identical or deceptively similar to each other? 2. Whether the petitioners were entitled to the exemption under Notification No. 148/82-C.E., dated 22.4.1982?
Ratio Decidendi: The court held that the term 'common trade mark aerated waters' under Notification No. 148/82-C.E., dated 22.4.1982, meant aerated waters manufactured and sold with the 'same' trade mark or brand name, and not with 'similar' trade mark or brand name. The court found that the petitioners were using different trade marks or brand names and that they were not deceptively similar to each other. Therefore, the petitioners were entitled to the exemption under the notification.
Final Decision: The court allowed the writ petitions, quashed the order of the Collector of Central Excise, Madurai, and held that the petitioners were entitled to the exemption under Notification No. 148/82-C.E., dated 22.4.1982.
The petitioners in these writ petitions have filed these petitions under Article 226 of the Constitution of India, for the issuance of a writ quashing the proceedings of the second respondent - Collector of Central Excise, Madurai, in his C.No. V/ID/15/3/82, CX-3 Order No. 66/87, dated 3.11.1987, and to pass such further or other necessary orders. As these writ petitions arise out of a common order they are dealt with together.
2.The brief facts of the case are these : These six petitioners in these six writ petitions are different partnership or proprietary concerns engaged in the manufacture and sale of aerated waters. The following are the particulars relating to their name, constitution, date of establishment, etc.:
The petitioners are independent concerns having their own separate registration under the Tamil Nadu General Sales tax and separate income tax assessments, separate Small Scale Industries Certificate and separate manufacturing places.
3. On 31st July, 1985, the Superintendent of Central Excise, Madurai, issued a common show cause notice to all the petitioners, alleging that they have been using a common trade mark viz., 'Sri Ganesh', that the total value of clearance of aerated water from these six units during the financial year 1981-82 had exceeded Rs. 15, 00, 000 and that they are not eligible to avail of any duty exemption in respect of the clearance made by their respective factories from 1.3.1982, onwards in terms of Notification No. 31/82, superseded by a Notification No. 148/82-C.E., dated 22.4.1982, issued by the Government of India in the Ministry of Finance in exercise of the powers conferred on them by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944. According to this notice the six units have deliberately suppressed the fact of using the common brand name 'Sri Ganesh' with intention to evade payment of Central Excise duty and had thereby contravened Rules 9(1), 52, 52-A, 53, 173-B, 173-C, 173-G and 226 of the Central Excise Rules. The petitioners were therefore called upon to show cause why a penalty under Rules 9(2), 52-A, 173-Q and 226 of the Central Excise Rules should not be imposed upon these six units separately and pay duty as specified in Annexure A to the said notice from each unit in respect of clearance of aerated waters made therefrom.
4.The petitioners sent identical replies claiming that these six units are not common having common business or interest, that the constitution of each unit has been separately approved by the sales tax and Income-tax Authorities and hence the manufacture of aerated water attributed to these units cannot be said to be the production or manufacture on behalf of one and the same manufacturer. They also denied that they are using common trade mark or brand name which were as follows
The petitioners, therefore, claimed that they are entitled to exemption from duty in pursuance of Notification No. 148/82-C.E., dated 22.4.1982.
5. The second respondent, Collector of Central Excise, Madurai by his impugned order dated 3.11.1981, held that the production of aerated waters in the six units cannot be said to be the production of one manufacturer but the usage of identical trade marks or closely similar brand names would disentitle them to the exemption under the aforesaid notification and ordered payment of Central Excise duty of Rs. 6, 86, 134.36 by the six units and imposed a penalty of Rs. 40, 000 on Sri Pillaiyar Soda Factory, Madurai - W.P. 12711/87; Rs. 5, 000 on Sri Mappillai Vinayagar Aerated Water Industry, Dindigul - W.P. 12712/87; Rs. 15, 000 on Sri Mappillai Vinayagar Aerated Water Industry, Madurai - W.P. 12713/87; Rs. 25, 000 on Sri Anaimugan Soda Factory, Madurai - W.P. 12714/87; Rs. 50, 000 on Sri Ganesh Soda Factory, Trichi - W.P. 12715/87, and Rs. 30, 000 on Sri Vignesh Soda Factory, Madurai - W.P. 12716/87. It is to quash these proceedings of the second respondent - Collector of Central Excise, Madurai, the petitioners have filed t
