TaxTMI 
TaxTMI 
2005 (4) TMI 654
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....onging to "another person" viz. Shri K.P.R. Sakthivel, Kali Aerated Water Works, Chennai attracted the bar created in para 4 of the above Notification as amended by Notification No. 59/94-C.E. The amounts of duty mentioned in the 3rd column of the table given below are sought to be recovered for the periods mentioned in the 4th column thereof from the assessees named in the 5th column. The persons named in the last column of the table who are the respondents herein had obtained the respective manufacturing units mentioned in the 5th column, in terms of a DEED OF MUTUAL AGREEMENT dated 12-3-1993 entered into between 10 coparceners (including the respondents) of an erstwhile Hindu Undivided Family (HUF) and were independently running the business of manufacture and sale of aerated waters, etc. in their respective territories during the respective periods :- 1. 2. 3. 4. 5. 6. Appeal No. O-I-A Amount Period Unit's Name Proprietor (S/Shri) E/454/2002 130/2002 dt. 8-7-2002 Rs. 6,92,485/- 12-5-94 to 19-12-94 Kali Aerated Water Works, Madurai-I Division K.P.R. Dhanushkodi E/455/2002 131/2002 dt. 8-7-2002 Rs. 61,81,832/- ....
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....and names/trade marks on their products. Shri K.P.R. Sakthivel, S/o Shri K.P. Rajendran was running the business at Madras. On 31-3-77, he was authorised to submit an application before the Registrar of Trade Marks to get the above brand names/trade marks registered afresh. Accordingly, Shri K.P.R. Sakthivel obtained a Registration Certificate from the Trade Mark Registry. In April, 1992, there was a partition of immovable properties among members of the family. This was followed, in 1993, by execution of a "Deed of Mutual Agreement" relating to use of trade marks. In terms of the DEED OF MUTUAL AGREEMENT dated 12-3-93, Shri K.P.R. Sakthivel permitted other members of the family to use the brand names/trade marks in their respective areas. Thus Shri K.P.R. Dhanushkodi, who was running the business at Madurai, could use the brand names/trade marks in the marketing area allotted to him under the above agreement dated 12-3-93. The other respondents also could use the brand names/trade marks in their respective territories. All the respondents were individually availing exemption under Notification No. l/93-C.E., dated 28-2-93 also. A dispute arose between the respondents and the depar....
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....t decided this issue, it is for him to take up the issue after giving an opportunity to the appellants herein. On this short ground, we are of the opinion that the matter has to go back to the adjudicating authority the Assistant Collector of Customs to determine the classification of the goods manufactured by the appellants as well as their claim regarding the exemption of excise duty. 6. Though the learned Single Judge had decided the issue on merits, and had given a finding, since the adjudicating authority had not applied his mind, and decided the question, and also we having found the matter has to go back to the adjudicating authority for proper consideration as to the disputed question of facts, it is necessary that the findings of the learned Single Judge on this aspect alone have to be set aside. 7. Accordingly, the findings of the learned Single Judge in this regard on merits of the claim of the appellants are vacated. The appeals are ordered accordingly and the matter is remitted back to the Assistant Collector of Customs for the purpose of proceeding with the adjudication process afresh." 4. Pursuant to the above judgment, the original authoritie....
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....riods, the brand names/trade marks stood registered in the name of Shri K.P.R. Sakthivel and that other members of the family (respondents) were only permitted to affix them on their goods sold within their respective territories. This position was clear from the terms of the DEED OF MUTUAL AGREEMENT dated 12-3-93. There was nothing in that agreement to indicate that the respondents shared with Shri Sakthivel the ownership of the brand names/trade marks. Thus, according to ld. SDR the brand names/trade marks indisputably belonged to Shri K.P.R. Sakthivel who was covered by the expression "another person" used in para 4 of the Notification (as amended). It was argued that on the wordings of para 4 of the Notification (as amended), the benefit of exemption under the Notification was not available to the branded goods cleared by any of the respondents. Para 4 ibid was in the nature of an exception which required to be strictly construed. To buttress the point, the ld. SDR referred to the Supreme Court's judgments in Rukmani Pakkwell Traders - 2004 (165) E.L.T. 481 (S.C.) and Commissioner v. Mahana Dairies - 2004 (166) E.L.T. 23 (S.C.). She also relied on the Tribunal's decision in Kor....
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....orded his own findings and these findings were not faulted by the Division Bench. In the circumstances, the reliance placed by the original authorities on the judgment passed by the ld. Single Judge was not inappropriate. 8. Referring to the affidavits filed by the respondents in the High Court, ld. SDR pointed out that the respondents themselves were of the view that, if para 4 of the Notification was given effect to, they would be liable to pay Duty of Excise on the branded goods cleared by them after 1-4-94. 9. On behalf of the respondents, Shri C. Natarajan, Senior Advocate referred extensively to the provisions of the DEED OF MUTUAL AGREEMENT and submitted that, by virtue of the said agreement, all the respondents were co-owners of the brand names and each of them was entitled to use the brand names in his own territory to the exclusion of all others. Shri K.P.R. Sakthivel, in whose name the brand names stood registered, was not entitled to exclusive use thereof for all the areas covered by the agreement. He could use the brand names only within the territory allotted to him under the DEED OF MUTUAL AGREEMENT. He could not be held to be the sole owner of the br....
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.... payment of duty. Such an exception had to be strictly construed, ld. Counsel submitted, drawing support from "The Construction of Statutes" by Earl T. Crawford. Further, it was argued that the burden was on the Revenue to show that the goods in question were covered by the exception engrafted in para 4 ibid. In this connection, reference was made to the Supreme Court's judgment in Collector v. K. Mohan & Co. Exports - 1989 (43) E.L.T. 811 (S.C.). Ld. Counsel claimed that, in the instant case, the Revenue had not succeeded in establishing that the goods cleared by the respondents during the relevant periods attracted para 4 of the Notification. 11. Referring to the judgment passed by the ld. Single Judge of the High Court in the Writ Petitions of the respondents and others, ld. Counsel expressed the view that nothing contained in the said judgment could be relied on in the instant case as the judgment was set aside by a Division Bench of the Court. 12. We have carefully considered the submissions. There is no dispute of any of the facts constituting the family business history of the respondents. With the death of Shri P.V.S.K. Palaniappa Nadar, the surviving male m....
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....at such party shall have no right to use the trade name/marks in future because of such contravention". Apparently, it was in terms of the above clause of the DEED OF MUTUAL AGREEMENT that Shri K.P.R. Dhanushkodi, proprietor of M/s. Kali Aerated Water Works, Madurai filed a suit in the Court of Additional District Munsif, Madurai against S/Shri K.P.R. Sakthivel (Chennai) (1st defendant), K.P.R. Singaravel (Erode) (3rd defendant), K.P.R. Nageswaran (Karaikudi) (4th defendant) , K.P.D. Rajendran (Tirunelveli) (5th defendant), K.P.D. Sureshkumar (Salem) (7th defendant) and K.P.D. Prem Kumar (Virudhunagar) (8th defendant) and others for a decree of declaration and injunction. The reliefs prayed for in the said suit (OS No. 578 of 1994) were in respect of the right to use the brand names within the places allotted to the plaintiff in the DEED OF MUTUAL AGREEMENT dt. 12-3-93. The Civil Court, on 26-3-96, granted decree to the plaintiff, Shri K.P.R. Dhanushkodi declaring his exclusive right to use the brand names within the allotted territory and restraining the defendants (the present respondents, Shri K.P.R. Sakthivel and others), by permanent injunction, from interfering with the sa....
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....od 4-1997 to 3-1994, Shri K.P.R. Singaravel (one of the respondents) had held the brand names/trade marks jointly with Shri K.P.R. Sakthivel and some others. The cases of Malabar Fisheries (supra) and Sohanlal & Others (supra) wherein, unlike the present respondents, erstwhile co-parceners of Hindu joint families claimed co-ownership of properties - capital assets in the former case and trade marks in the latter - and resorted to legal remedies to attain the benefit of such right upon dissolution of the joint family partnerships and never did anything in the nature of relinquishment of the right, are of no support to the respondents in the present appeals. In the circumstances, for the periods of dispute, the brand names can only be considered as belonging to Shri K.P.R. Sakthivel in whose name they stand registered for the purpose of use on aerated waters and other non-alcoholic beverages and drinks covering entire Tamil Nadu. In this view of the matter, each of the respondents was clearing his goods under brand names belonging to 'another person' (Shri K.P.R. Sakthivel) and such clearances attracted the exception under para 4 of Notification No. 1/93-C.E. (as amended). 14.&ems....
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.... court has held to the same effect in the case of Rukmani Pakkwell Traders (supra) also. In the case of K. Mohan & Co. Exports (supra), the Hon'ble Supreme Court had occasion to deal with an exemption Notification which granted exemption from payment of duty to all excisable goods other than those specified in the Table annexed to the Notification and it was held that the onus of showing that the goods were covered by the exclusion was on the department. There is no controversy about this legal position either. The question is whether the department has succeeded in this case to show that the branded goods cleared by the respondents during the relevant periods attracted para 4 of Notification No. 1/93-C.E. (as amended). We have already found that the Revenue has succeeded in discharging this burden. 15. The Revenue has relied on the Tribunal's decision in the case of Kores India Ltd. (supra). In that case, the issue related to denial of SSI exemption to M/s. Econoprints Stencils Pvt. Ltd. (ESPL, for short) on the ground that the goods manufactured and cleared by them was bearing the brand name "ECONOPRINT" belonging to M/s. Kores India Ltd. A report of the Examiner of Trade....
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....i K.P.R. Sakthivel). Ld. Counsel has argued that nothing contained in this judgment could be relied on inasmuch as the said judgment was set aside by a Division Bench of the Court. We have already extracted the relevant portion of the Division Bench judgment vide para 3 of this order. Their lordships were remanding the cases to the adjudicating authorities, upon finding that those authorities had not decided on the issue whether para 4 of Notification 1/93-C.E. (as amended) was applicable only if different users of the brand name used it on identical goods. The remand order accordingly required the adjudicating authorities to determine the classification of the goods manufactured by the writ-appellants, i.e. to ascertain as to whether they were manufacturing identical goods or not. But the Hon'ble Supreme Court has since held vide para 6 of Rukmani Pakkwell Traders (supra) and para 6 of Mahaan Dairies (supra) that even if the goods are different, so long as the trade name or brand name of another person is used, the benefit of SSI exemption would not be available. In any case, the fact remains that the findings recorded in relation to applicability of para 4 of Notification 1/93-C.....