2004 (2) TMI 69 - SC - Central Excise

Exemption under Notification No.1/93-C.E. requires strict compliance; use of a registered trade mark (Clause 4) excludes it

SC allowed the appeals, holding that entitlement to the Notification No.1/93-C.E. exemption must be determined by strict compliance with its terms. Where ... Exemption Notifications to be strictly construed - Brand name or trade name disentitles exemption - Definition of 'brand name' or 'trade name' in Explanation IX - Use of part of a brand or mark sufficient to disentitle exemption - Limited applicability of administrative circulars to alter notification wordingBrand name or trade name disentitles exemption - Definition of 'brand name' or 'trade name' in Explanation IX - Whether the respondents were entitled to exemption under Notification No.1/93-C.E. despite marketing scented supari using the brand/mark 'ARR' and the photograph associated with that group - HELD THAT: - Clause 4 of Notification No.1/93-C.E. removes the exemption where the specified goods 'bear a brand name or trade name (registered or not) of another person.' Explanation IX defines 'brand name' or 'trade name' to include a name, mark, design, symbol, monogram, label, signature or invented word or writing used so as to indicate a connection in the course of trade between the goods and some person. The Tribunal's reliance on an earlier Board circular and its conclusion that disqualification arises only where the brand is registered in respect of the same goods are impermissible departures from the Notification's plain wording. The Notification does not qualify Clause 4 by requiring the brand to be registered for the same goods; nor does it limit the disqualification to an exact or complete reproduction of a registered mark. Use of the relevant brand or even part thereof, insofar as it indicates a commercial connection to another person, falls within the disqualification. Administrative circulars cannot be used to add or read limitations into an exemption notification; the Notification must be interpreted on its own terms and strictly. Applying these principles, the respondents' use of the words 'ARR' together with the photograph identifying the ARR group brings their goods within Clause 4 and disentitles them to the exemption. [Paras 5, 6, 7, 8, 10]The Tribunal's judgment was erroneous; the respondents are not entitled to the exemption under the Notification because their goods bore the brand/trade name of another person.Final Conclusion: The appeals are allowed; the impugned judgment of the Tribunal is set aside, the findings of the lower authorities restored, and there is no order as to costs. Issues:Interpretation of Notification No. 1/93-C.E. regarding exemption for scented supari based on brand name ownership.Analysis:The case involved traders claiming exemption under Notification No. 1/93-C.E. for scented supari marketed under the brand 'ARR,' purchased from M/s. ARR Nutcon Products. The Notification exempts scented supari, but Clause 4 excludes goods bearing a brand name of another person. The Tribunal allowed the traders' appeal, relying on a Circular regarding ownership of brand names. However, the Supreme Court found the Circular inapplicable as the traders were not owners of the brand 'ARR' or the founder's photograph. The Court emphasized strict construction of Exemption Notifications and noted that the Tribunal erred in requiring the brand name to be used on the same goods for which it is registered. The Court clarified that any use of a brand name indicating a trade connection disqualifies from exemption, even if not on the same goods. The Court also rejected reliance on a different Circular and previous case laws on trademark infringement, emphasizing strict compliance with Notification conditions for claiming benefits. Ultimately, the Court set aside the Tribunal's judgment, reinstating the lower authorities' decision and allowing the appeals with no costs awarded.