The use of distinctive labels on a product can establish a connection between the product and the manufacturer or retailer in the course of trade, thereby attracting the levy of excise duty under the Central Excise and Salt Act, 1944.

M. ANANTANURAYANAN, C.J.

The appeal is instituted by the Collector of Central Excise, Madras, from the Judgment of Srinivasan, J. In W.P. No. 897 of 1962 allowing the petition for the issue of a writ of prohibition filed by the Proprietor of Messrs T.C. Nagalingappa and Company, Madras. The point involved is a very simple one and, since the relevant provisions have been dealt with somewhat extensively by the Learned Judge (Srinivasan, J.) in allowing the Writ, we think that it is sufficient if we focus attention upon the only issue that arises for our determination.

2.The facts are not in dispute. Eucalyptus oil is a pharmaceutical preparation, under the Indian Pharmacopoeia, and it is not the exclusive product of any individual proprietor. We have no doubt whatever that, if any person attempts to obtain a proprietary right in the words "Eucalyptus Oil" under the Law of Trade Marks, he will fail. But, persons like the writ petitioner (here respondent) do purchase eucalyptus oil in bulk, and market the product by repacking it in small and convenient bottles. The respondent has a licence under the Drugs Act for this purpose. As the Learned Judge points out, by Finance Act 2 of 1962 item 14(E) of the First Schedule to the Central Excise and Salt Act, 1944, was amended. The entry itself was amended, and a lengthy explanation was inserted following the entry.

3.The relevant extracts are to be found in the Judgment of the learned Judge, and it is sufficient for our present purpose to confine our attention to the Last part of the Explanation. That is to the following effect :

".... any other Mark such as 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 of otherwise to use the name or mark with or without any indication of identity of that person." *

4.The simple question in the present case is whether the labels or carton of the respondent, fall within the last part of the Explanation; the learned Judge has himself said that the earlier parts of the Explanation are necessarily applicable, and we need not traverse that ground again. If the last part of the Explanation also applies to the cartons, or labels of the respondent's bottles of eucalyptus oil, then it would inevitably follow that the levy sought to be effected by the Collector of Central Excise is justified and that no writ of prohibition can issue.

5.An initial possibility of confusion may be immediately eliminated. It might appear, at the first blush, that there is no question here of any label, design or signature, used on the bottles of the respondent, being associated with the respondent as 'distinctive' within the meaning of the Law of Trade Marks. It could be argued that Eucalyptus oil (Indian Pharmacopoeia) is a standard product common to the pharmaceutical trade, and not the exclusive property of any manufacturer whatever. Indeed, that has never been in dispute. Under those circumstances, it could be further argued that anyone merely bottling and selling a standard product, even if he used his own labels, is not setting up any trade connection between the product and himself for the simple reason that the product is common to the pharmaceutical business. But this argument overlooks two vital factors. Firstly, all these retail sellers of Eucalyptus oil like the present respondent, order their stocks in bulk from various distillers of the oil who are resident in Nilgiris. It may very well be that the oil, as distilled by one wholesale distiller, differs from the oil of another, in quality, consistency or medicinal properties. If one retailer is fortunate in obtaining his bulk supplies from a distiller whose oil has superior qualities, this retailer may very legitimately attempt, by means of labels affixed to his bottles to establish a trade c