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TMI Blog1995 (12) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... and name `ARK' in stylised script in the course of trade known as brand name/trade name of M/s. Arksan Pvt. Ltd., who are a trading company and that they were not eligible for the grant of exemption under Notification No. 175/86. Consequent upon initiation of proceedings against the appellants, Collector held vide Adjudication Order aforesaid that the exemption availed of by the noticee was unlawful inasmuch as they were affixing specific goods with the brand name or trade name of another person, not eligible for the grant of exemption under Notifications dated 1-3-1986 and 28-2-1993. He also held that there was suppression on the part of the noticee. He, therefore, confirmed demand of duty raised against each of the appellants and also imposed personal penalties ranging from Rs. 5,000/- to Rs. 7,50,000/- on the appellants. 3. Ld. Advocate, Shri Shridharan, appearing for M/s. Khanna Industries and Others made following main submissions : - (i) The appellants started manufacture of sanitary fittings from about 1972 under the trade name `ARK'. This was duly registered with the Registrar of Trade Marks. The form of presentation of trade name `ARK' on the cardboard boxes in which san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both". This was not at all the case with the Notification No. 175/86. (iv) Collector has attempted to justify his order by invoking the explanation under Notification No. 175/86, as what constitutes a brand name. Collector has wrongly concluded that brand name ARK in stylised manner belongs to ARKSAN because it creates a link between the goods and ARKSAN. Explanation VIII under Notification 175/86 only defines what is a brand name or a trade name and cannot be relied upon to determine the ownership of the brand name or trade name. The royalty for the use of brand name is not received by ARKSAN but by Khanna Industries, the appellant. It is not conceivable that ARKSAN would be the owner of the brand name and Khanna Industries would receive the royalty. Assuming, their contention was not accepted, ARKSAN Pvt. Ltd. was a manufacturer eligible to exemption under Notification No. 175/86 and in this connection, vide Letter dated 5th October, 1993 at Page 249 of the Paper Book, they have given details of their schemes right from 1-4-1991 to 31-3-1992 to the Department in support of their contention that they were a small-scale industry. Collector has totally disregarded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they had entered into an agreement with Arksan and suggested to Arksan for development of a new name and logo style for them and their brand. M/s. Arksan agreed to logo carried in coloured advertisements in ARK in stylised script. The advertising charges for the logo had been included in the design and art charges pertaining to advertising campaign of Arksan. The concept behind the Arksan advertising campaign was to create consumer awareness for the stylised logo of Arksan. He submitted that it was Arksan who got the stylised script developed and paid for it. 6. Considering along with the circumstantial evidence which indicates close relationship between M/s. R.K. Industries and Arksan as R.K. Khanna was the Founder Director of Arksan, his daughter had taken over as Director and the letters `A' was the initial of his wife, `RK' of his own and `SAN' for his son, it was rightly concluded by the Collector in the light of explanation in the Notification that Noticees were not eligible to small-scale exemption. As regards the registration of the new stylised logo it was done only after enquiries started and in any case it was only recommendation to the Registrar in Bombay and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it has widened the scope of the main Section, effect has to be given to the legislative intent notwithstanding the fact that the legislature named that provision as an explanation. Legislature has different ways of expressing itself & in the last analysis, the words used alone are repository of legislative intent. Similarly, it was held by Karnataka High Court in case of N. Nagamanikam Setty and Another v. Collector, Bangalore 1983 (14) E.L.T. 2301 (Kar.), that an Explanation appended to Section or Clause gets incorporated into it and becomes integral part of [it] and has no independent existence apart from it. 8.2 There can, therefore, be no serious controversy that the true meaning of the expression brand name or trade name of another person has to be read with explanation regarding brand name or trade name and the two have to be harmonised. 9. From the material placed before us, particularly the statement of the concerned person from the advertising company, it is clear that the logo in the stylised form was developed for Arksan Pvt. Ltd. It is they who paid for its development and this fact has not been denied. The literature placed from Page 98-108 of the Pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it would render the condition meaningless in such cases where goods cannot be affixed with any brand name on themselves. For instance, in a large variety of goods like cosmetics, medicines, chemicals, etc., no brand name can be affixed on goods, and therefore, is affixed only on the cardboard container. Placing the construction such as is being advanced would render Notification meaningless in such cases. 10.2 "Goods" in the relevant para of Notification 175/86 have to read only as "Marketable" goods. For, it is not the case of the Ld. Advocate that these goods, after the plain trade name `ARK' was affixed thereon, straightway entered into, and swamn in, the stream of whole-sale trade with nothing on except their birth-suits. No. These goods left the factory only after these were clothed into cartons/cases bearing stylised monogram, of ARK, in a manner, and loudly advertised in issue after issue of India Today, such as would establish a connection, in the course of trade, of these goods, with ARKSAN. 11. Relevant Para, however, also stands on other limb, apart from the person &, that is, that person should not be eligible for grant of exemption under this Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 13. The case of Opus India cited by Ld. Advocate is distinguishable as in that case, it was clearly proved that the brand name was registered in the name of Opus India. 14. In regard to time bar, again we find that this is intrinsically linked with the question emerging out of the second limb of relevant Para of the exemption Notification which relates to person eligible to exemption and has to be determined in the light of that decision apart from other factors relevant to question of time-bar. 15. For the reasons set out hereinbefore, while holding that stylised `ARK' is a trade name of Arksan within the meaning of relevant para of Notification 175/86 as amended, we set aside the impugned order and remand the matter to Collector for a de novo decision after arriving at a finding in regard to eligibility to exemption of M/s. Arksan Pvt. Ltd. under Notification No. 175/86, as amended, such as would or would not attract disqualification under the relevant Para 7, and disclosing such evidence to the appellants as may be necessary and, shall also, depending upon decision such as may be taken, arrive at a definite finding in regard to other pleas of use of trade mar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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