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2007 (3) TMI 5 - SC - Central ExciseSSI Exemption Alleged that appellant were used identical brand name of other company for their (buiscuits) Appellant provide registration certificate with retrospective effect as a evidence but not tantamount to conferment of exemption benefit
Issues Involved:
1. Eligibility for SSI Exemption under Notification No. 1/93-C.E. 2. Ownership and use of the trade mark "Meghraj." 3. Validity and implications of the agreement between M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich Food Products (P) Ltd. 4. Retrospective effect of the trade mark registration. Detailed Analysis: 1. Eligibility for SSI Exemption under Notification No. 1/93-C.E. The appellants were engaged in the manufacture of biscuits under the brand name "Meghraj." The Department issued show cause notices alleging that the appellants were not eligible for SSI exemption under Notification No. 1/93-C.E., as amended, because they used the brand name "Meghraj," which was registered to another manufacturer, M/s. Kay Aar Biscuits (P) Ltd. The Assistant Commissioner and the Commissioner (A) both concluded that the appellants were using the brand name "Meghraj" on their products and thus were not entitled to the exemption. The CEGAT upheld this decision, leading to the civil appeals. 2. Ownership and Use of the Trade Mark "Meghraj" The appellants contended that they had applied for the ownership of the trade mark "Meghraj" in 1991, and the registration was granted in 2000 with retrospective effect from 1991. They argued that the Department failed to prove that M/s. Kay Aar Biscuits (P) Ltd. owned the trade mark. However, the court found that the agreement dated 22-11-1989 between M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich Food Products (P) Ltd. declared M/s. Kay Aar Biscuits (P) Ltd. as the owner of the trade mark "Meghraj." The court emphasized that the burden of proving no intention of indicating a connection with another person's goods lay on the appellants, which they failed to discharge. 3. Validity and Implications of the Agreement between M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich Food Products (P) Ltd. The agreement dated 22-11-1989 indicated that M/s. Kay Aar Biscuits (P) Ltd. permitted M/s. Rich Food Products (P) Ltd. to use the trade mark "Meghraj" for wafers, not biscuits. The court noted that Madan Verma, a common director in both companies, did not provide any explanation or evidence regarding the transfer of the trade mark. The court found no merit in the appellants' argument that M/s. Kay Aar Biscuits (P) Ltd. had abandoned the trade mark, as there was no evidence to support this claim. 4. Retrospective Effect of the Trade Mark Registration The court examined the retrospective effect of the trade mark registration granted on 30-6-2000, effective from 30-9-1991. It clarified that the principle of deemed equivalence to public user under the Trade Marks Act could not be extended to Excise Law. The court held that the retrospective registration did not automatically confer the benefit of exemption under the Excise Law, especially when there was evidence of the appellants using the trade mark of another entity, M/s. Kay Aar Biscuits (P) Ltd. Conclusion The Supreme Court dismissed the civil appeals, concluding that the appellants were not entitled to the benefit of SSI exemption under Notification No. 1/93-C.E. The court emphasized that the burden of proof lay on the appellants to demonstrate no intention of indicating a connection with another person's goods, which they failed to do. The retrospective registration of the trade mark did not confer the benefit of exemption, as the trade mark "Meghraj" was found to be owned by M/s. Kay Aar Biscuits (P) Ltd. during the relevant period.
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