TaxTMI 
TaxTMI 
2009 (2) TMI 4
X X X X Extracts X X X X
X X X X Extracts X X X X
....s for the purpose of indicating a connection in the course of a trade between specified goods and some person using such name or mar k with or without any indication of the identity of that person. According to the appellants they manufacture ice-cream makers cooler and Popcorn makers and avail of the benefit of SSI Exemption Notification and sell ice cream maker in their own brand name "CREMICA " and sell the same to different customers including United Tele Shopping (in short 'UTS') and Tele Shopping Network (in short 'TSN') and that in respect of sale to UTS & TSN the goods were being examined by the Supervisors of these customers before dispatch from their factory and stickers bearing UTS/TSN were being affixed and these sticker bear the words "Checked Sl. No. Do not remove this sticker" and that the Department has treated the words UTS and TSN as brand name belonging to other and has disallowed the benefit of small scale exemption notification. It was submitted that the words UTS and TSN are not brand names but are the abbreviations of the name of the marketing companies which does not amount to use of the brand name. Stand of the department was as follows: It has not been c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3) of the said Table against such clearances. 3. For the purpose of determining the aggregate value of clearances, the following clearances shall not be taken into account, namely :- (a) any clearances, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reason; (b) any clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4 below : (c) any clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of specified goods. Such clearances of specified goods used as inputs shall be deemed to be exempt from the whole of the duty of excise leviable thereon: (d) any clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene. 4. The exemption contained in this notification shall not apply to goods bearing a brand name or trade name, whether register....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uing a particular notification. Clause 4 of this notification and the Explanation (set out hereinabove) make it clear that the exemption will not apply if the specified goods (i.e. scented supari) bear a brand or trade name of another person. Neither in clause 4 of the notification nor in Explanation IX is it provided that the specified goods must be the same or similar to the goods for which the brand name or trade name is registered. The Tribunal has, in adopting the above reasoning, effectively added to the notification words to the effect "brand name or trade name in respect of the same goods". This is clearly impermissible. It is to be seen that there may be an unregistered brand name or an unregistered trade name. These might not be in respect of any particular goods. Even if an unregistered brand name or trade name is used, the exemption is lost. This makes it very clear that the exemption would be lost so long as the brand name or trade name is used irrespective of whether the use is on same goods as those for which the mark is registered. 6. The Tribunal had also held that under the notification the use must be of "such brand name". The Tribunal has held that the wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the decision of the Tribunal is unsustainable. It is accordingly set aside." 8. Further in Commissioner of Central Excise, Calcutta v. Emkay Investments (P) Ltd. and Anr. (2005 (1) SCC 526) this Court stated the position in law as follows: "7. The dispute, in the instant case, is as to whether the respondents who are manufacturers of plywood under their own brand name " Pelican" have made themselves disentitled to the benefit of small-scale exemption Notification No.175/86-CE by using a logo indicating "MERINO " on their products along with their brand name. The next question which arises is as to whether the markings or inscriptions should be considered as the brand name of M/s Merinoply and Chemicals Ltd. and will come within the mischief of clause 7 read with Explanation VIII of the notification, as contended by the department. Clause 7 reads as follows: "The exemption contained in this notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification." Explanation VIII of clause 7 reads as follows: `....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hrough the common order passed by the Tribunal. In our view, the Tribunal has erred in not appreciating that to attract provision of clause 7 of Notification No. 175/86-CE, it is sufficient that the product contained a trade mark /logo of another ineligible person which was fully satisfied in the instant case and whether the product also contained the brand name/trade name/logo of the manufacturer would not and cannot alter such position. Likewise, the interpretation of Explanation VIII as advanced by the Tribunal does not appear to be correct in law and in fact. It was imperative that by using the registered logo "MERINO "belonging to M/s Merinoply and Chemicals Ltd. on their own product M/s Emkay Investments Ltd. fulfilled the purpose of indicating a relation between the said products and the logo owner so as to influence the trade and therefore, the provisions of Explanation VIII were fully satisfied so far as the case on hand was concerned. The finding of the Tribunal to the contrary, in our opinion, is wrong and liable to be set aside." 9. Considering the position involved in Reiz Electrocontrols (P) Ltd. v. Commissioner of Central Excise, Delhi-I (2006 (6) SCC 213) the posit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... large latitude should be allowed to the legislature. The courts should bear in mind the following observations made by a Constitution Bench of this Court in R. K. Garg v. Union of India [1981 (4) SCC 675]: (SCC pp. 690-91, para 8) "Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The Court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey v. Doud [35 4 US 457 (1957)] where Fra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and not by its crudities or inequities or by the possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues." 11. The same principle should hold good in the matter of exemption notifications as well, for the said power is part and parcel of the enactment and is supposed to be employed to further the objects of enactment subject, of course, to the condition that the notification is not ultra vires the Act, and/or Article 14 of the Constitution of India. (See P. J . IraniV.State of Madras [(1962) 2 SCR 169 ] ". 11. In Pahwa Chemicals Private Limited v. Commissioner of Central Excise, Delhi [2005 (189) ELT 257 (SC)] it was held as follows at para 3: " Paragraph 4 and Explanation IX of Notification have been construed by this Court in Commissioner of Central Excise v. Rukhmani Pakk well Traders, 2004 (165) E.L.T. 481; as also in Commissioner of Central Excise, Chandigarh v. Mczhaan Dairies, 2004 (166) ELT. 23. In both these decisions this Court held that Paragraph 4 read with Explanation IX of the no....