9911796707
TMI Blog2018 (11) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... of breads” which brand name is also printed in the packet in which the goods are sold - if the specific product has not been included under the Certificate of Registration, issued under the Trade Marks Act, then, the mere fact that the trade name is printed in the package cannot result in the higher tax being levied on the product. The reason being that it is not a product “sold under brand name registered under the Trade Marks Act” as the recital goes in Entry 11 of SRO 82 of 2006. Bread and rusk as per the classification enabled under the Trade Marks Act are distinct products falling under the same class. So is the distinction palpable as discernible from the entries under general heading with HSN code 1905; under the Customs Tariff Act - the assessee's product to be covered under Entry 7 of the Third Schedule which deals with bakery products other than those sold under brand name registered under Trade Marks Act. We hence answer the question raised against the assessee insofar as the claim for exemption under First Schedule and against the Revenue on the claim of inclusion under SRO No. 82/2006 and declare the toasted products of the assessee to be exigible to tax under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products are aligned against the specific HSN Code 1905.40.40, they do not fall under Entry 6 of the First Schedule: Bread of all types . The Tribunal in fact refused to look into whether the product was registered or not under the Trade Marks Act,1999 [for brevity, the Trade Marks Act ]. The learned Counsel for the assessee submits that if at all a different view is taken and the product is found to be included under Entry 7 of the Third Schedule then there should be a remand to the Tribunal. However, we are of the opinion that since the facts are not in dispute, we ourselves can look into that question, alternatively arising in the revision; which essentially is on classification. 3. We have to first note the various Entries under the KVAT Act, being: First Schedule: 6. Bread of all kinds - 1905.90.90 Third Schedule: 7. Bakery products, sweets, confectionery and other food products other than those sold under brand name registered under the Trade Marks Act, 1999. ***** S.R.O. 82 of 2006 11. Bakery products including biscuits of all varieties, cakes, pastries, pizza bread, sold under brand name, registered under the Trade Marks Act, 1999. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich takes in all bakery products other than that sold under registered trade mark. 6. The learned Counsel would also rely on Vishnudas Trading v. The Vazir Sultan Tobacco Co. Ltd. [JT 1996 (6) 366] , which was relied on in a recent decision of the Hon ble Supreme Court in Civil Appeal Nos.2943 to 2944 of 2018, M/s.Nandhini Deluxe v. M/s.Karnataka Co-operative Milk Producers Federation Ltd. It is the argument of the assessee that the comprehensive list of goods classified under Trade Mark-Class 30, bread and rusk are separately shown and hence are treated differently. It is also argued that in a like circumstance a Division Bench of this Court had found that despite there being a brand name shown in the package of a produce, if the said product is not registered under the Act of 1999, then there can be no sale found of a product under brand name registered under the Trade Marks Act. 7. The learned Senior Government Pleader, on the other hand, produces the packets of the various products and argues that the brand name is clearly shown therein. It is also contended that, if the assessee has a contention that the product is included under the broader classification of brea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Fourth Schedule under the Trade Marks Rules or the International Classification that applies in the relevant assessment year, which we will deal with a bit later. We have also seen from the text book we earlier referred to, that there is a comprehensive list of goods classified under the Trade Mark Class 30 as available in the International Classification . 10. Vishnudas Trading [supra] was a case in which the respondent had obtained registration of the brand name Charminar under the General Class of manufactured tobacco. The appellant had sought for registration of chewing tobacco in the same brand name, which was declined by the authorities for reason of there being a registration obtained under the General Class of manufactured tobacco by the respondent. The appellant then filed an application before the Trade Mark authorities for confining the registration of the respondent to cigarettes, permitting the registration of the brand name for the product of the appellant, which was also a manufactured tobacco, but not cigarettes. The Hon ble Supreme Court found so in the above decision: 47. The class mentioned in the 4th Schedule may subsume or comprise a numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent perspective when the taxing statute levies a higher tax on branded items sold under trade mark. There the consumers desire or tendency to pick up that product sold under popular brand name is sought to be taxed by the legislature at a higher rate. The reason also is that the product sold under a popular brand name, which is also registered under the Trade Marks Act, is in more demand and the discerning customer prefers it despite the higher price it commands, for reason of the brand name, which bears a certain assurance of the quality of the product. In the present case, the assessee has obtained registration of the brand name for all types of bread ; bread alone being the separate class as seen from the comprehensive list of goods classified under Class 30. Whether ordinary bread as understood commercially and rusk, are the separate species coming under the same class or genus is the vexing question. We have to keep in mind the line of distinction, though it may be thin, in addressing the question from the perspective of registration of trade mark for separate products coming under the same class and taxation at the higher rate for reason of the stamp of quality the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was from an order of clarification which found the pickle sold by the assessee to be exigible to tax at the higher rate. A Division Bench of this Court found that the trade mark registration taken by the assessee was not with respect to pickles and hence the pickle sold by the assessee though showing the trade mark in the cover of the package, would not be exigible at the higher rate. In the present case also, the contention of the assessee is that there is no trade mark registration with respect to rusks, toasted bread etc. , which is also separately dealt with under SRO No.82/2006 as distinguished from breads . 15. The specific claim of the assessee was under Entry 6 which exempts from tax Bread of all kinds . We notice that Entry 6 is aligned to HSN code 1905.90.90. Hence to understand the correct description of the goods we have to look at the Customs Tariff as available under Chapter 19, of the Customs Act. The specific heading 1905 is extracted hereunder:- Tariff Item Description of goods Unit Rate of duty Standard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion we have also to look at the Rules for the Interpretation of Import Tariff specifically that dealing with a - . Under the General Explanatory Notes , it is stated that if the description of an article or group of article under a heading, is preceded by a - , the said article or group of articles is to be taken as a sub-classification of the article covered by the general heading. When the description of an article or a group of articles is preceded by -- (two), then it is to be taken as a sub-classification of the immediately preceding article/s preceded by - (one). If an article or group of articles is preceded by --- (three) or ---- (four) then that is to be taken as a sub-classification of the immediately preceding description which has - (one) or -- (two). Under Heading 1905, Bread and other related bakery items are shown. Rusk, toasted bread and similar toasted products is proceeded by one - and is aligned to HSN Code 1905.40.00. Hence the same is a sub-classification of the articles shown under the general heading description of bread and other bakery items. After Rusk, toasted bread and similar toasted products as against HSN 1905.90, Other is shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d confectionery along with various other food items which as has been declared in Vishnudas Trading(supra) is the class or genus. The learned Counsel had taken us through the Alphabetical List of Goods available in Volume II of the authoritative text book, referred to earlier, which gives a more comprehensive description of the species coming within the common genus; wherein bread and rusk are shown differently. We have to immediately notice the argument of the learned Senior Government Pleader that the International Classification adopted by India has been statutorily recognised only after the Fourth Schedule - {Classification of Goods and services-Name of the classes} was deleted from the Trade Marks Rules 2002, in the year 2013. Rule 22 was also substituted recognising the NICE Classification; by GSR 21(E) dated 14.10.2013. 19. The State asserts that the subject assessment years are when Fourth Schedule was available in the Trade Marks Rules 2002 wherein Class 30 provides the following description:- Coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee, flour and preparations made from cereals, bread, pasty and confectionery, ices; honey treacle; yeast bakin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. So the goods and services specified in the Fourth Schedule provided a means by which the general contend of numbered international classes can be quickly identified. The items shown there, only corresponds to the major component of each class and was not intended to be exhaustive. Even as per the Trade Marks Rules, 2002 before its amendment in the year 2013, determination of classification of particular goods and services had to be with reference to the International Classification. As we saw from the authoritative text, the alphabetical list of goods shows rusk and bread as species of the class or genus in class 30, as held in Vishnudas Trading [supra]. The enumeration in Class 30 as per Fourth schedule can only be considered to be the genus of which rusk and bread are the species. 22. In this context, we also have to look at the KVAT Act and the understanding of the State legislature in bringing out various entries under the different schedules. As we earlier noticed, bread of all kinds as seen from Entry 6 of First Schedule is aligned to a 8 digit HSN Code; which by reference to Customs Tariff Act indicates rusks and toasted bread products to be excluded from ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
