1991 (2) TMI 128 - HC - Central Excise

Exemption - Interpretation of Statute - Writ Jurisdiction - Availability of alternative remedy - Words and Phrases

Issues Involved:
1. Whether the six writ petitioners are manufacturers of an article having a common trade mark.
2. Whether the writ petitions were maintainable without exhausting alternative statutory remedies.

Detailed Analysis:

Issue 1: Common Trade Mark
The primary forensic issue in these appeals was whether the six writ petitioners were manufacturers of an article having a common trade mark. The context arose from a visit by the Central Excise Preventive Officer to M/s. Vignesh Soda Factory, where aerated waters were found in bottles embossed with the image of "GANESH" and other similar labels. The Preventive Officer believed that the six units were engaged in manufacturing aerated waters under a common brand name "GANESH" and had cleared them at a lower concessional rate of excise duty.

The petitioners, however, argued that they were independent concerns with separate registrations and individual Small Scale Industry Certificates. They denied using a common trade mark or brand name and claimed entitlement to individual duty exemptions under Notification No. 148/82-C.E., dated 22-4-1982.

The Collector of Central Excise concluded that though the production of aerated waters in the six units could not be said to be the production of one manufacturer, the usage of identical trade marks or closely similar brand names disqualified the petitioners from individual exemptions. Consequently, he imposed a cumulative duty and penalties on the six units.

The learned single Judge, however, found the Collector's conclusion unreasonable. The Judge noted that the Department's own case admitted the use of 'similar' trade marks, not the 'same' trade mark, which did not disqualify the petitioners from duty exemptions under Notification No. 148/82-C.E. The Judge held that the petitioners were manufacturing and selling aerated waters under different trade marks or brand names, and thus, were entitled to individual exemptions.

Upon appeal, it was reiterated that the term "common trade mark aerated waters" as defined in the notification implies aerated waters sold under the same trade mark or brand name. The notification did not use the terms "similar" or "identical," but "same." Therefore, the Collector's interpretation of "same" as "similar" or "deceptively similar" was incorrect. The Court emphasized that fiscal laws must be strictly construed, and the plain language of the notification should be followed.

Thus, the writ petitioners were entitled to individual exemptions as their products were not manufactured under a common trade mark. However, it was conceded that the respondents in W.A. Nos. 1022 and 1023 of 1988 were manufacturing under a common trade mark and thus liable to pay the appropriate duty.

Issue 2: Maintainability of Writ Petitions
The second issue was whether the writ petitions were maintainable without exhausting alternative statutory remedies. The respondents argued that the writ petitions should be dismissed as the petitioners had not exhausted the statutory remedies under the Central Excises and Salt Act, 1944. The petitioners contended that the writ petitions were maintainable as they involved interpretation of a statutory notification, not disputed questions of fact.

The learned single Judge held that the existence of an alternative remedy was not an absolute bar to the maintainability of the writ petitions. Since the petitions involved interpretation of Notification No. 148/82-C.E., dated 22-4-1982, and did not require investigation into disputed facts, the writ petitions were maintainable.

The Court noted that the rule of self-restraint on exercising jurisdiction under Article 226 of the Constitution, where an alternative remedy exists, is a rule of convenience and discretion, not a rule of law. The Court emphasized that the nature of the dispute and the stage at which the writ petitions are considered are relevant factors. Given that the writ petitions had been admitted and heard on merits, and involved an important question of law, the learned single Judge rightly held that the writ petitions were maintainable.

Conclusion
The Court concluded that the six writ petitioners could not be said to be manufacturers of an article having a common trade mark or brand name and were entitled to individual exemptions under Notification No. 148/82-C.E., dated 22-4-1982. The appeals, except for the specific cases of W.A. Nos. 1022 and 1023 of 1988, were dismissed. The Court also upheld the maintainability of the writ petitions despite the existence of alternative remedies.

← Previous Next →