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2018 (5) TMI 700 - AAR - GSTExemption from GST - supply of cereals, pulses and flour - sale under the brand name or not - Whether the subject goods, proposed to be sold under Stream 1, where the package of the subject goods would merely have a declaration mentioning the name and registered address of the Applicant as the manufacturer, as per the statutory requirement under Subject Statutory Provisions, can be considered as not bearing a brand name , and, accordingly eligible for exemption from GST in terms of relevant entries to N/N. 2/2017 Central tax (Rate) dated 28th June 2017 and, the corresponding entries under N/N. 2T2017-lntergrated tax (Rate) dated 28th June 2017 and N/N. 2/2017-State Tax (Rate) dated 29th June 2017)? Whether the subject goods proposed to be sold under Stream 2 (refer Annexure I), where the package of the subject goods would have a declaration mentioning the name and registered address of the manufacturer as per the statutory requirement under the Subject Statutory Provisions as also the declaration Marketed by- Aditya Birla Retail Limited can be considered as not bearing a brand name , and, accordingly eligible for exemption in terms of relevant entries to the Exemption Notifications? Whether the declarations made on the package, by inter alia using common/generic terms viz. Value , Daily , Superior and Choice , for the sole purpose of indicating the quality of the product so as to enable the customers to identify and buy products based on their requirements, budget and preferences can be construed to be a brand name for the purpose of the Exemption Notifications? Held that - there is mention of the name Aditya Birla Retail Limited . It is indicative of the situation that the product belongs to Aditya Birla Retail Limited which is a big name in the business world, world over - It can be seen that a mark includes a name . Further, it also includes a combination of colours. In the present case, we see that the packaging for both the Streams would be using a combination of colours from the logo of the Aditya Birla Group. And we see that the name Aditya Birla also appears on the package. The name Aditya Birla is more than sufficient to establish an identity with the goods. The observation as to whether the brand name appears in entirety or in parts does not appear at all cannot be the chief criterion; primary focus has to be on whether an indication of a is conveyed in the course of trade between such specified goods and some person using the mark - In the present case, the applicant also has a family of customers purchasing from the More Stores and associating the Brand with some quality standards. Thus, the customers are aware of the More brand as well as the products of the More brand which are available in the More Stores alongwith products of other manufacturers. Therefore, a new strategy, all of a sudden, in view of the provisions of the GST Act, to discontinue the earlier practice of mentioning the Aditya Birla logo or the More brand would not mean that the customers would have any difficulty in associating or identifying the products with the More brand. The applicant though is proposing to make changes as per the Stream 1 and 2 mentioned above, it is equally clear that the goods are being supplied through the More Stores which is a registered brand as on the 15th May 2017 irrespective of whether or not the brand would be subsequently deregistered and further, the name Aditya Birla Retail Limited also appears on the unit container. The products supplied under Stream 1 and Stream 2 would amount to supply under a brand name on the basis of all the above factors and the attending circumstances. Ist and 2nd question answered in negative - as regards 3rd question, The question cannot be raised in isolation, Refer to the answers in respect of the Streams 1 and 2.
Issues Involved:
1. Whether the subject goods sold under Stream 1 can be considered as 'not bearing a brand name' and eligible for GST exemption. 2. Whether the subject goods sold under Stream 2 can be considered as 'not bearing a brand name' and eligible for GST exemption. 3. Whether the use of common/generic terms like 'Value', 'Daily', 'Superior', and 'Choice' on the package can be construed as a 'brand name' for GST exemption purposes. Detailed Analysis: Issue 1: Subject Goods Under Stream 1 Question: Whether the subject goods, proposed to be sold under Stream 1, where the package of the subject goods would merely have a declaration mentioning the name and registered address of the Applicant as the manufacturer, can be considered as 'not bearing a brand name' and eligible for exemption from GST. Analysis: - The applicant contends that mentioning the manufacturer's name and address as per statutory requirements does not constitute a 'brand name'. - The relevant GST Notification exempts goods that are not put up in unit containers and do not bear a registered brand name. - The definition of 'brand name' includes any name or mark used to indicate a connection between the goods and the person using the name or mark. - The applicant's name "Aditya Birla Retail Limited" is a well-known brand associated with quality and trust. - The Supreme Court decision in CCE v. Grasim Industries Ltd. states that even the name of a company can be considered a brand name if it indicates a connection in the course of trade. - The goods sold under Stream 1 would be available only in More Stores, which are associated with the Aditya Birla brand. Judgment: The subject goods sold under Stream 1 are considered to bear a brand name and are not eligible for GST exemption. (Answered in the negative). Issue 2: Subject Goods Under Stream 2 Question: Whether the subject goods proposed to be sold under Stream 2, where the package of the subject goods would have a declaration mentioning the name and registered address of the manufacturer and the declaration 'Marketed by- Aditya Birla Retail Limited', can be considered as 'not bearing a brand name' and eligible for exemption from GST. Analysis: - The applicant argues that the declaration 'Marketed by Aditya Birla Retail Limited' does not amount to branding. - The relevant GST Notification's definition of 'brand name' includes any name or mark indicating a connection in the course of trade. - The name "Aditya Birla Retail Limited" and the association with More Stores create a brand identity. - The Supreme Court in CCE v. Australian Foods India (P) Ltd. emphasized that even if a brand name does not appear on the product, the environment in which it is sold can establish it as a branded product. - The goods under Stream 2 are sold exclusively in More Stores, reinforcing the brand connection. Judgment: The subject goods sold under Stream 2 are considered to bear a brand name and are not eligible for GST exemption. (Answered in the negative). Issue 3: Use of Common/Generic Terms Question: Whether the declarations made on the package using common/generic terms like 'Value', 'Daily', 'Superior', and 'Choice' for indicating the quality of the product can be construed as a 'brand name' for GST exemption purposes. Analysis: - The applicant uses these terms to indicate product quality and not as a brand name. - The GST Notification defines 'brand name' as any name or mark indicating a connection in the course of trade. - The terms 'Value', 'Daily', 'Superior', and 'Choice' do not inherently indicate a connection to the applicant. - However, the context in which these terms are used (i.e., in More Stores) may influence their interpretation. Judgment: The question cannot be raised in isolation and must be considered in the context of the answers provided for Streams 1 and 2. (Refer to the answers in respect of Streams 1 and 2). Conclusion: - For both Streams 1 and 2, the goods are considered to bear a brand name and are not eligible for GST exemption. - The use of common/generic terms must be evaluated in the context of the overall branding and marketing environment.
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