1999 (1) TMI 164 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 175/86-C.E. regarding brand names on pharmaceutical products.

Analysis:
The case involved a dispute regarding the applicability of Notification No. 175/86-C.E. on pharmaceutical products. The appellants manufactured various products, some bearing the brand name of a distributor and others with their own brand name. The issue arose when show cause notices were issued seeking to deny the benefit of the notification to all products affixed with another manufacturer's brand name. The Asstt. Commissioner initially relied on a Supreme Court judgment and observed that the connection between the goods and the manufacturer was established by prominently displaying the assessee's name, dropping the demands for duty. However, the jurisdictional Commissioner directed a review application, leading to appeals before the tribunal.

The appellant's counsel relied on previous tribunal judgments where labels bore brand names of both manufacturers and marketing companies, arguing that the notification's provisions were not breached in such cases. In contrast, the Departmental Representative defended the Commissioner's order by citing a tribunal judgment indicating that the presence of the marketing company's brand name indicated a connection between the goods and the trader, thus disqualifying the benefit of the notification.

The tribunal analyzed the cited judgments and the facts of the case. It considered the distinction between trade marks and house marks, noting that the presence of a distributor's house mark did not necessarily disqualify the benefit of the notification. Referring to the Palsons Drugs judgment, the tribunal observed that the prominence of the manufacturer's logo on the labels was crucial in determining the applicability of the notification. Similarly, in line with the Nippa Chemicals judgment, the tribunal concluded that the mere presence of the marketing company's name did not automatically render it a brand name.

Ultimately, following the ratio of the Palsons Drugs judgment, the tribunal found that the Asstt. Commissioner's orders were appropriate, overturning the Commissioner's decisions. The appeals were allowed, and the original orders were restored. Additionally, the stay applications were also disposed of in light of the main appeals being resolved.