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TMI Blog2010 (3) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority have been dismissed. The Additional Commissioner, Delhi by his order dated 27-8-04 had confirmed the demand of duty to the extent of Rs. 40,00,163/- while appropriating the amount of duty of Rs. 12,50,000/- already deposited by the appellants and had ordered payment of interest under Section 11AB of the Central Excise Act, 1944 and had also imposed penalty of equal amount of duty against the company and further penalty of Rs. 90,000/- under Rule 25 of the Central Excise Rules, 2002 on the ground of contravention relating to the goods seized at their premises. Besides penalty of Rs. 20,00,000/- and Rs. 15,00,000/- has been imposed against the Directors namely Shri Ashok Sharma and Sh. Dheeraj Sharma respectively under Rule 26 of the said Rules as also there is order for confiscation of the goods valued at Rs. 5,89,273/- seized at the premises of the company while giving option to redeem the same on payment of fine of R.s. 2,50,000/-and also the goods worth Rs. 18,29,209/- seized at the premises of different traders are ordered to be redeemed on payment of fine of Rs. 10,00,000/- alongwith appropriate amount of duty. The said order was passed pursuant to the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the brand name in favour of the appellants was filed on 23-7-2003 and the letter dated 17-10-03 from the Trade Marks Registry, Mumbai was received by the appellants acceding to their request for entry in the register in relation to the said brand name in favour of the appellants. The said entry was made on 16-10-2003. The certificate in terms of Section 137 of the Trade Marks Act was forwarded to the appellants on 6-4-2004 registering the appellants as subsequent proprietor of the brand name 'GURU' w.e.f. 1-4-2001. 6. In the background of the above facts, it is the case of the appellants that apart from lawful permission from the erstwhile original owners of the brand name 'GURU' right from the beginning for use of the said brand name for the product manufactured by the appellants, there was also a Memorandum of Understanding executed between the parties sanctioning such use of the brand name by the appellants w.e.f. 2-4-2001 and further even the appellants were registered as the subsequent, proprietor of the brand name w.e.f. 1-4-2001. Meanwhile there was also a Deed of assignment executed on 1-4-2003. In the background of these facts according to the appellants, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th retrospective effect. He further submitted that the records nowhere disclose any intention on part of the appellants to evade the duty at any point of time. He further submitted that the records nowhere disclose that the goods, which were seized, were liable to be confiscated. He also submitted that in view of the fact that the provisions of law under Section 11AB came into force from 11-5-2001, the claim for interest cannot relate to the period prior to the said day. It was also the contention on behalf of the appellants that there was no suppression of any fact at any point of time and therefore, the show cause notice could not have been issued on 7-1-2004 in relation to the period prior to one year preceeding issuance of the said show cause notice and claim in that regard in any case is barred by limitation. Further referring to the decision of the Larger Bench in the case of Ramply (India) Ltd. v. CCE, Belapur reported in 2007 (216) E.L.T. 129 (Tribunal) = 2007 (82) RLT 363, learned Advocate submitted that mere non-disclosure of the use of brand name of another person in the classification list cannot justify invocation of extended period of limitation. 8. Learned DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuant to the certificate dated 6-4-04 that the appellants acquired the right of subsequent proprietor in relation to the said brand name. There was also Assignment Deed dated 1-4-2003 and the affidavit of Sh. Ashok Sharma dated 1-10-2003 permitting the use of the brand name. 10. It is also not in dispute that the notification in question clearly provides that the exemption contained under said notification shall not apply to the specified goods bearing a brand name or trade name whether registered or not of another person except in the cases specified in the said notification and that the appellants' case does not fall in any of the said exceptions. It is, however, the contention on behalf of the appellants that they were lawfully entitled to use the brand name 'GURU' pursuant to the consent, assignment and registration of the said trade name in favour of the appellants. 11. The notification explains the term "brand name" or "trade name" to mean a brand name or a trade name, whether registered or not, i.e. to say, the name or a mark, such as symbol, monogram, label, signature or invented word or writting which is used in relation to such specified goods for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are different so long as the trade name or brand name of some other Company is used, the benefit of the Notification would not be available and further, once a trade name or brand name is used then mere use of additional words would not enable the party to claim the benefit of the Notification. 13. In Bhalla Enterprises' case while observing that there was no reason to differ from the reasoning in the earlier decisions in Rukhmani Pakkwell Traders and Mahaan Dairies' case it was held by the Apex Court that Clause 4 of Notification No. 1/93-C.E. exempted certain goods upto a particular value and excluded such benefit in case of product bearing brand name or trade name of others and that therefore, Clause 4 of the said Notification clearly disapproved the benefit of the exemption in cases where someone else's name in connection with their goods was used either with the intention of indicating in a manner a connection between the assesses goods and such other person. There is no requirement for the owner of the trade mark should use the name or mark with reference to any particular product. The object of the exemption notification was neither to protect the owners of the trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion from payment of duty when it requires the claimant of such benefit to comply with certain condition, the claimant has no option but to comply with such condition to enable him to avail the benefit under such notification. 15. The expression "brand name or trade name (registered or not) of another person" found in the explanatory notes describing the scope of the term brand name and trade name under the said notification cannot be construed either to enlarge the scope of exemption or reduce the same. Grant of exemption is essentially an executive function of the Government based on the policy framed in relation to revenue the matters by the Government. It is not for the Tribunal or any Court or the authority in the name of interpretation to read down such notification or add to or substract something from such notification. 16. Plain reading of the Notification nowhere discloses that the exemption thereunder can be availed for the product bearing brand name or trade name of other person on the basis of consent of the proprietor of such brand name or trade name. Neither it discloses that assignment of right in relation to brand name or trade name by the proprieto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once the trade mark has been registered in the name of the assessee by the statutory authority authorized to do so recognizing the assessee to be the sole proprietor of the trade mark for India, the adjudicating authority as well as the Commissioner (Appeals) erred in denying the benefit of the notification under consideration. This apart, the earlier decision of the Tribunal in Bigen Industries (supra) between the parties on the same facts for the period from 12th August, 1989 to 25th August, 1989 having attained finality, as the Revenue did not file any further appeal, the Revenue is precluded from taking a different stand in the present appeals as per law laid down by this Court in a catena of cases. (See Collector of Central Excise, Pune v. Tata Engineering Locomotives Co. Ltd. reported in (2003) 11 SCC 193; Berger Paints India Ltd. v. Commissioner of Income Tax, Calcutta reported in (2004) 12 SCC 42, Birla Corporation Ltd. v. Commissioner of Central Excise reported in (2005) 6 SCC 95 = 2005 (186) E.L.T. 266 (S.C.); and Jayaswals Neco Limited v. Commissioner of Central Excise, Nagpur reported in 2006 (195) E.L.T. 142 (S.C.)". Proper reading of the decision in Bigen Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from para 3 of the decision which reads thus - "The contention put forth before the Tribunal as well as before us is that no document has been shown that the subsequent assignment in favour of M/s. Vikshara Trading Investment P. Ltd. was registered as contemplated under the Trade and Merchandise Marks Act, 1958. This aspect was taken note of by the Tribunal that the trade mark need not necessarily be in respect of all goods unless registration has been so acquired and it is therefore, permissible in law to have same brand name for different classes of goods owned by different person, and in that background found in favour of the respondent and held that the Notification No. 223/87-C.E. dated 22-9-1987 was applicable. When as a matter of fact it is held that there was an assignment in favour of the first respondent and that fact was not in serious dispute the mere fact that the assignment was not registered could not alter the position. Therefore, we decline to interfere with the order made by the Tribunal and to that extent the appeal is dismissed in respect of respondent No. 1". (Emphasis reported) 21. Taking into consideration rival contentions in this regard as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on does not arise at all for consideration at this stage as point of (imitation is not a pure question of law. It is a mixed question of law and facts. A party who wants to raise such point has to raise the same at the earliest point of opportunity so that the defending party can rebut the same by producing proper evidence. Admittedly the appellants had not raised the said point either in reply to the show cause notice or even in the appeal memo filed in the present case. It is only in the course of the argument that the learned Advocate sought to raise the said point. Such a procedure is not permissible. 26. It is also sought to be contended that considering the provisions of Rule 25 of the Central Excise Rules, 2002, the goods seized were not liable to be confiscated. Rule 25 provides that subject to the provisions of Section 11AC of Central Excise Act, 1944, if any producer, manufacturer, registered person of a warehouse or a registered dealer either removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules or does not account for any excisable goods produced or manufactured or stored by him or enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant the imposition of penalty against them under Rule 26. It is not mere observation that the Directors have role in clandestine removal of the goods that would support the imposition of penalty under the said provision. The order should disclose some connection between the transaction and the Directors and the fact of clandestine removal or other such activity in relation to the goods. In the absence thereof, the appellants are justified in contending that the penalties against Directors cannot be sustained. 28. In the result the appeals partially succeed and the impugned order to the extent it confiscates the goods valued at Rs. 5,89,273/- seized at the premises of the appellants and imposition of penalty Rs. 90,000/- against the appellant company as well as imposition of penalty of Rs. 20,00,000/- and Rs. 15,00,000/- against the Directors under Rule 26 is liable to be set aside. 29. As far as interest is concerned, the appellants are also justified in saying that there cannot be any demand of interest for the period prior to 11-5-2001. The interest payable under Section 11AB of the Said Act would be w.e.f. 11-5-2001 and not prior to that day. No other interferen ..... 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