2004 (2) TMI 73 - SC - Central Excise

Entitlement under Notification No. 8/98-C.E. demands strict compliance; benefits cannot be extended by stretching its words

SC held that entitlement to Notification No. 8/98-C.E. requires strict compliance with its terms; benefits cannot be conferred by stretching or adding ... Exemption under Notification No. 8/98-C.E. - use of another's brand name or trade name - effect of additional words appended to a trade name - strict compliance with terms of a notification - entitlement on subsequent registration of a markExemption under Notification No. 8/98-C.E. - use of own company name on packaging - Whether respondents selling pickle in pouches bearing only the name of their own company are entitled to the exemption under the Notification. - HELD THAT: - The Court accepted the unanimous view of the authorities below that where the respondents sell pickle in pouches using only the name of their own company (M/s. Mahaan Dairies Ltd.), they are not disentitled from claiming the benefit of the Notification. No principle of disqualification arises from such use of the respondent's own company name on the packs. [Paras 4]Respondents are entitled to the benefit of the Notification when the packs bear only their own company name.Use of another's brand name or trade name - effect of additional words appended to a trade name - strict compliance with terms of a notification - Whether use by the respondents of the trade name 'Mahaan' in the same distinctive style as the registered mark of another company, with the addition of the words 'Taste Maker', permits claim of the Notification's exemption. - HELD THAT: - The Court held that use of a trade name or brand name of another person disentitles the user from the Notification, irrespective of whether the goods are the same as those for which the mark is registered. The addition of extra words such as 'Taste Maker' does not alter this result. The Court relied on its contemporaneous decision in Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders and approved the Tribunal's earlier reasoning in Festo Controls (P) Ltd. v. CCE, Bangalore. Emphasising the requirement of strict compliance, the Court stated that benefits under a Notification cannot be extended by construing or adding words beyond the Notification's terms; consequently the Tribunal's contrary decision based on Rukmani Pakkwell Traders was set aside. [Paras 5, 6, 7, 8]Use of the registered trade name 'Mahaan' (in the same style) by respondents, even with the addition of 'Taste Maker', disqualifies them from the Notification; benefit cannot be obtained by appending words or by stretching the Notification.Entitlement on subsequent registration of a mark - Whether an application by respondents to register the mark 'Mahaan Taste Maker' affects present entitlement to the Notification. - HELD THAT: - The Court clarified that registration of the mark 'Mahaan Taste Maker', if and when effected, would render the applicants entitled to the benefit of the Notification in accordance with the Board's Circular No. 88/88 dated 13-12-1988. Until such registration is granted, the disqualification arising from using another's registered trade name remains operative. [Paras 9]Prospective registration of the mark would permit entitlement under the Notification once registration is obtained; it does not cure present disqualification.Final Conclusion: The Tribunal's decision is set aside insofar as it allowed exemption when respondents used the registered trade name 'Mahaan' in the same style despite adding 'Taste Maker'; respondents remain entitled to the Notification only when packaging bears solely their own company name, and prospective registration of 'Mahaan Taste Maker' would permit entitlement if registration is granted. Issues:Whether the respondents are entitled to exemption under Notification No. 8/98-C.E. dated 2nd June, 1998 for excise duty payment based on the use of a brand name or trade name.Analysis:The case revolved around the interpretation of Notification No. 8/98-C.E., which granted exemption from excise duty for certain goods unless they bore a brand name or trade name of another person. The key issue was whether the respondents, part of a group of companies, had used the brand name of a different company. The registered trade mark 'Mahaan' was used by M/s. Mahaan Foods Ltd., and the respondents sold pickle with the same name in a similar style, albeit with the addition of 'Taste Maker.' The authorities determined that selling pickle with only the company's name did not disqualify them from the exemption, but using the registered brand name did.The Supreme Court referred to a previous judgment in Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders, where it was established that using a trade name or brand name of another company, regardless of the goods, would disqualify the benefit of the Notification. The addition of extra words to the brand name did not enable the party to claim the exemption. This interpretation was supported by a decision in the case of Festo Controls (P) Ltd. v. CCE, Bangalore. The Court emphasized that strict compliance with the terms of the Notification was necessary to claim its benefits, and stretching or adding words to the Notification for benefit was impermissible.The Court dismissed the argument that the respondents had applied for the registration of the mark 'Mahaan Taste Maker,' clarifying that only upon registration would they be entitled to the Notification's benefits as per Board's Circular No. 88/88. The Tribunal's decision was deemed unsustainable and set aside. The appeals were disposed of with no order as to costs.