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Issues involved: Interpretation of Notification No. [175/86-C.E.], misuse of brand name, entitlement to exemption under Central Excise Rules.
Summary: The judgment by the High Court of Bombay at Goa involved a case where M/s. D.C.I. Pharmaceuticals Pvt. Ltd., as manufacturers of pharmaceutical products, claimed entitlement to exemption under Notification No. [175/86-C.E.]. The dispute arose when the Assistant Collector of Central Excise denied this benefit, citing the use of a brand name "betnor" associated with another company, Indoco Remedies Ltd. The Collector of Central Excise (Appeals) upheld this decision, leading to a Writ Petition challenging both orders. The court examined the carton packaging of the product "betnor" and noted the presence of logos of both DCI Pharmaceuticals Pvt. Ltd. and Indoco Remedies Ltd. The issue revolved around whether the use of Indoco Remedies Ltd.'s logo on the packaging affected the eligibility for exemption under Notification No. [175/86-C.E.]. The court referred to para 7 of the Exemption Notification, which disallows exemption if specified goods bear the brand name of an ineligible manufacturer. The court analyzed the definition of "brand name" or "trade name" under Explanation VIII of para 7 to determine the applicability of the exemption. Citing a Supreme Court case, the court emphasized the importance of preventing misuse of brand names by ineligible manufacturers to maintain the integrity of the exemption scheme. It was clarified that if the same brand name is not used by an ineligible manufacturer, the small manufacturer should not be denied the exemption. In this case, since there was no evidence that Indoco Remedies Ltd. used the brand name "betnor" for similar products, the petitioners were deemed entitled to the benefit of the Exemption Notification No. [175/86-C.E.]. Ultimately, the court allowed the Writ Petition, setting aside the orders of the Assistant Collector of Central Excise and the Collector of Central Excise (Appeals), and declared that the petitioners were indeed entitled to the exemption under Notification No. [175/86-C.E.]. The ruling was made absolute with no order as to costs.
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