1. The issue involved in this appeal filed by M/s. Elymer Havells Electrics is whether they were affixing the excisable goods with the brand name of other persons so as to make them not eligible for the benefit of Notification No. 175/86-CE dated 1.3.1986.
2. Briefly stated the facts are that the appellants manufacture electric meters which were affixed with the brand name 'Elymer Havells'. The Collector, Central Excise, in the impugned order dated 25.11.91, confirmed the demand of Central Excise duty amounting to Rs. 11,46,524.07 P. and imposed a penalty of Rs. 50,000, holding that benefit of Notification No. 175/86 was not (sin) as they were affixing their excisable goods with the brand name of M/s. Havells Industries and M/s. Elymer Electric Controls (India) Pvt. Ltd. He relied upon the decision in the case of Parle Products Ltd. AIR 1972 SC1359.
3. Shri J.P. Kaushik, the learned Advocate, submitted that the appellants were using the brand 'Elymer Havells' since 1981 and it was their established brand, though unregistered, in the electric meter market; that the brand is nothing but first two words of the name of their firm Elymer Havells Electrics; that the said brand name has not been registered by any person under Trade and Merchandise Marks Act; that brand "Havell's" is registered with respect to Fuses and Distribution Boards only; that brand 'Elymer' was registered with respect to parts of fittings: that as these two brand names were not registered for electric meters, the two units had no rights under Trade merchandise Marks Act nor these brands had any goodwill or relation in course of Trade in respect of electric meters. He relied upon the decision in the case of Taj Serpent Eggs Factory v. CCE Madurai 1995 (9) RLT 539 (T) wherein it was held that benefit of Notification No.175/86 is available if the brand name of another manufacturer, used in respect of one product, is used by the assessee in respect of another product. The learned Counsel also pointed out that M/s. Havells Industries do not use the word 'Elymer' before their brand name Havell's; that further the words 'A Mark of Distinction' are mentioned below HAVELL's which are missing in the Appellants' case: that thirdly they have placed the name Elymer Havell's in a rectangular whereas M/s.
Havells have not placed their Logo in any rectangular. According to the learned Counsel both the brand names are totally different which is evident from the following: Due to misprint in the certified copy, Paragraph Nos. have been serial numbered from No. 4 onward 4. The learned Advocate, further, mentioned that Havell's logo is printed by them only on packaging as their goods are marked by M/s.
Havells Industries; that this fact has been mentioned in para 8 of the show cause notice issued to them; that printing of logo of marketing company does not make the notification No. 175/86 not available. He relied upon the decision in the case of Palsons Drugs and Chemical Industries v. CCE, Calcutta-I(T) and DCI Pharmaceuticals P. Ltd. v. CCE, Goa 1999 (32) RLT 956 (T) wherein it was held that mere projection of the name of the marketing company does not amount to it being a brand name. He also submitted that as the Collector himself has observed that the Appellants were not exactly using the trade mark registered by Havells Industries, the matter ends then and there; that benefit of notification cannot be denied on the basis of deceptively similar brand name. He relied upon the decision of Madras High Court in the case of UOI v. Pillaiyar Soda Factory wherein it was held that "A bare reading of explanation shows that the sale must be with 'same' trade mark or brand name in order to attract categorisation of 'common trade mark aerated waters' for the purpose of the notification. It does not use the word 'similar' or 'identicals' but 'same'. The High Court also observed that the concept of "similar" or "deceptively similar", or "more or less identical", is a concept borrowed from the Trade & Merchandise Acts or the copyright Act which is aimed for the protection of innocent or unwary customers; that it would not be proper to import that concept while interpreting a notification issued under the Central Excise Rules, as it would have the effect of enlarging or restricting the scope of the notification. The learned Advocate also relied upon the decisions in A.G.I. Switches P. Ltd. v. CCE, New Delhi 1999 (32) RLT 569 (T) in which the Tribunal held that the benefit of notification No.1/93 cannot be denied as there was marked difference between the two brand names; that by no stretch of imagination, these can be considered identical merely because the words in capital "AGI" have been used within an oval shape figure. Finally, he submitted that larger period of limitation is not invokable as their unit is visited by the officers and the fact of their using the brand name Elymer Havell's was always within the knowledge of the Department; that they had not changed their working pattern with the amendment in notification No. 175/86 w.e.f.
1.10.1987; that for these reasons, no penalty was also imposable on them.
5. Countering the arguments, Shri M.C. Sharma, learned CDR submitted that as held by the Supreme Court in UOI v. Paliwal Electricals (P) Ltd. , the framework of policy and objective designed to be obtained should be implemented and achieved; that the object was that the manufacturers who are not eligible for the benefit of notification meant for small scale industry should not somehow get the benefit by circuitous route. He, further, submitted that the appellant is a group company of Havell's Group which is evident from page 40 of Paper Book wherein the appellant is mentioned as one of the Group companies; they are using Havell's name in their Logo and are paying Rs. 500 to Havell's for using the brand name; that even in their stationary, they are using trade name of Havell's and in their advertising material (page 39 of Paper Book) they have mentioned "Look for this seal for genuine Havell's products". The learned CDR pointed out that Explanation VIII to notification No. 175/86 clearly provides that Brand name or trade name shall mean a brand name or trade name which is used in relation to specified goods for the purpose of indicating a connection in the course of trade between specified goods and person using the trade name; that such brand/ trade name may be a name or a mark, symbol, monogram, label, signature or invented word or writing. He contended that by using the words Havell, the meters manufactured by the appellants are clearly recognisable as Havell's meters in the course of trade; that as held by the Supreme Court in Paliwal (sic) case, supra, if a small manufacturer affixes the brand name or trade name of an ineligible manufacturer, the very reason d'etre for granting the exemption disappears. The learned CDR also mentioned that the fact that brand name is affixed on a product different from the product belonging to the owner of the brand owner is not relevant as para 7 of the notification does not qualify that the brand name should be used for the same products. He relied upon the decision in the case of Khanna Industries v. CCE, Chandigarh . He also relied upon the decision in the case ofInter City Cable System (P) Ltd. v. CCE wherein the Tribunal did not extend the benefit of Notification No. 175/86 though the products manufactured by the brand name owner and the appellants were different.
6. He finally mentioned that the decision in the case of Pillaiyar Soda Factory is not applicable to the facts of the present appeal and decision in Palsons Drugs & Chemical's case is not relevant. In reply, the learned Advocate submitted that in Paliwal's case, the brand name used was same and as such that decision is not relevant; that if the appellants belong to same group of companies, it cannot be alleged that they were using the brand name of any other person; that there was no allegation in the notice that the appellants were using brand name 'Elymer'; that if brand name in part is used, the mischief of para 7 of the notification is not attracted. He placed reliance on the decision in the case of Emkay Investments P. Ltd. v. CCE, Calcutta-I 1998 (28) RLT 36 (T). The learned advocate finally submitted that the Department was aware that they were using the trade name of Havell's since 1981 as these words were printed in the letter dated 13.4.1981 addressed to the Supdt.; that further the words 'Elymer Havells' were used in the RT-12 returns as is evident from para 23 of the impugned order and accordingly the extended time of limitation not invokable.
7. We have considered the submissions of both the sides. It is observed that the appellants are affixing brand name Havell's on their product.
They have, however, contended that there are some differences in the manner, the words Havell's has been used by them such as words "A Mark of Distinction" are missing in their product and the words Havell's have been put by them in a rectangular which is not the case with the brand owner. The Appellants have relied upon the decision in Pillaiyar Soda Factory case, supra, to support their contention that the trade mark should be the 'same' and not deceptively similar or deceptively identical. We observe that in the said case the Hon'ble High Court was interpreting the phrase "Common trade mark aerated water" and in that context it was observed that the expression " implies aerated waters which are sold under the same trade mark or under the same brand name in more than one factory, whether belonging to one or more manufacturers." In the present matter the issue involved is whether the appellants were affixing the goods with a brand name of another person.
We agree with the findings of the Collector, in the impugned order, to the effect that the pictorial representation of the mark on the product gives an idea that there is a close connection with the product marketed by Havell's. The use of brand name 'Havell's' by the Appellants clearly indicate a connection in the course of trade between the goods of the appellants and brand name owner. We further observe that the Revenue has pointed out that the appellants were paying Rs. 500 p.m. to M/s. Havells Industry for using the brand name which has not been controverted by the appellants. We also do not find any force in the submissions of the appellants that as their product is different from the product of M/s. Havells Industry, mischief of para 7 will not be applicable.
8. The Ld. advocate has relied upon the decision in Taj Serpent Eggs case, supra. The Appellate Tribunal in the case of Intercity Cable Systems, relied upon by the Ld. CDR, observed that Madras High Court has taken a contrary view in the case of Bell Products Co. v. UOI 1995 (78) ELT 404 and held that "even if the Appellants were using the trade mark or brand name "Shyam" which was owned and registered by M/s. Shyam Antenna (P) Ltd. in respect of products which were different from the Appellants own products the benefit of the exemption under Notification No. 175/86 was not admissible to the appellants since they were using on their products the brand name of Shyam Antenna Electronics (P) Ltd., who were not eligible for the exemption under the said Notification." The Madras High Court in Bell Products case held as under:-- ...Can the petitioner be held to be entitled to the exemption merely because the products of the units are different notwithstanding the common or identical brand name used for the products. For the purpose of excise duty and application of the rates, it is the totality of the clearance in respect of different products when exemption is sought to be claimed under the Notification in question. The Notification apart from stipulating the mere user of the brand or trade name of another person, does not carry any further limitation on the said use that it should be in respect of similar or identical goods also.
9. It is thus, apparent, from decision of the Madras High Court that it is not necessary that the brand name should be used by another manufacturer only in respect of similar or identical goods. Thus following the judgment of Madras High Court and Tribunal's decision in Intercity Cable System's case, we hold that the appellants were not eligible to avail the benefit of exemption under notification No.175/86. We also find that the extended period of limitation is invokable as the fact of affixing brand name was not disclosed by the appellants to the Department. A letter written on 13.4.1981 to intimate the names of persons authorised to sign the excise gate-passes cannot at all be an intimation to the Department that they were affixing the brand name of Havell's on their product. We agree with the findings of the Commissioner that "mention in RT-12 of 'Elymer Havells' will not automatically allow the department to come to a conclusion that someone else is the owner of this brand name and also the fact that the brand name owner is not eligible for exemption under notification No.175/86." In view of these facts and circumstances we reject the appeal filed by the appellants.