Holding

The use of another person’s registered logo on the goods attracts clause 7 and Explanation VIII of Notification No. 175/86‑CE, rendering the respondents ineligible for the SSI exemption.

Summary

The respondents, Mis Emkay Investments Pvt. Ltd. and M/s Plyking, manufactured plywood under their own brand “Pelican” but also affixed the registered logo “MERINO”, owned by the large‑scale manufacturer M/s Merinoply and Chemicals Ltd., on the same goods. The Commissioner of Central Excise denied them the Small Scale Industries (SSI) exemption under Notification No. 175/86‑CE, invoking clause 7 and Explanation VIII, which bar exemption where a brand or trade name of another ineligible person is used. The Central Excise & Gold (Control) Appellate Tribunal had set aside the Commissioner’s order, but the Supreme Court held that the mere presence of the other firm’s registered logo on the goods suffices to attract clause 7 and Explanation VIII, irrespective of the respondents’ own brand. Consequently, the respondents were disentitled from the SSI exemption. The Court set aside the Tribunal’s decision and allowed the appeals of the Commissioner.

Issues considered

Whether the affixing of a registered logo/brand of another person who is not eligible for the SSI exemption disqualifies the assessee from the benefit of Notification No. 175/86‑CE under clause 7 and Explanation VIII
Whether the presence of the assessee’s own brand name alongside the other logo affects the applicability of clause 7/Explanation VIII
How “brand name” or “trade name” is to be interpreted under Explanation VIII of the Notification
Whether the exemption notification must be strictly construed in tax law

Legislation cited

Central Excise and Salt Act, 1944s. Section 4
Central Excise Rules, 1944s. Rule 173B, s. Rule 173C, s. Rule 173F, s. Rule 173G(2), s. Rule 226, s. Rule 52A, s. Rule 9(1)
Central Excise Tariff Act, 1985

Subjects

small scale exemptioncentral excisetrademarkbrand nameclause 7Explanation VIIInotification interpretationplywood manufacturingstrict construction

Judgment

COMMISSIONER OF CENTRAL EXCISE, CALCUTT A A
v.
MIS. EMKA Y INVESTMENTS (P.) LTD. AND ANR.

DECEMBER 8, 2004
B
[S.N. VARIA VA, DR. AR. LAKSHMANAN
AND S.H. KAPADIA, JJ.)

-- Central Excise Tariff Act, 1985; Sub-heading 4408.90/Central Excise
and Salt Act, 1944; Section 4/Central Excise Rules, 1944; Rules 9(1), 52A,
173B, 173C, 173F, 173G(2) & 226/Exemption Notification No. 175186-CE
C

and Explanation VIII thereunder :

Assessees!Firm using brand/logo owner by other manufacturer of
plywood on the plywood manufactured by them-Benefit of ememption
. Notification-Eligibility for-Held : Assessees used logo owned by another D.
lareg-scale manufacturer-By doing so they contravened the relevant excise
rules for the use of logo and became ineligible for grant of benefit of the
exemption Notification.

The questions which arose for determination is these appeals were E
as to whether the respondents/assessees, manufacturer of plywood using
the logo of another large-scale manufacturer of plywood in addition to
their own brand/logo have made themselves disentitled to the benefit of
small scale industries exemption Notification No. 175/86-CE and as to
whether the markings or inscriptions on the goods should ht> considered
as the brand name of a firm, and if these are used by others, whether F
it would come within the mischief of Clause 7 read with Explanation
VIII of the Notification.

It was contended by the appellant that assessees/firm by using a
registered logo, owned by a large-scale manufacturer, on the goods G
manufactured by t~em, became ineligible to the benefit of Small Scale
Industries Exemption Notification; that since assessees used the logo so
as to influence the trade, provision of Explanation VIII to the Notification
is attracted; and that the exemption provisions in ta"xing statute should
be construed strictly. H
761
762 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
.,.
A Respondents submitted that the benefit of the exemption Notification
could not be denied on the ground of affixing on the goods manufactured
by them a symbol/monogram owned by other manufacturer/person;
that the Customs Excise & Gold (Control) Appellate Tribunal rightly
found the markings on the goods manufactured by them and other
B manufacturer are entirely different; that the markings so used by them
could not create deception in the course of trade; and that there was no
visual or phonetic similarity between the logos used by them, vis-a-vis
used by the other manufacturer.

Answering the questions in the affirmative and allowing the appeals,
C the Court

HELD: 1.1. The impugned goods admittedly contained a registered
logo belonging to and owned by another firm. Thus it was a clear case
where the impugned goods were admittedly affixed with registered logo/
trade mark of other persons and hence not eligible to S.S.I. exemption.
]) (768-B]

1.2. The Tribunal has erred in not appreciating that to attract the
provision of clause 7 of Notification No. 175/86-CE, it is sufficient that
product contained a trade mark/logo of another ineligible person and
E whether the product also contained the brand name/trade name/logo of
the manufacturer, would not and cannot alter such positic:·. --, ilis
interpretation of Explanation VIII as advanced by the Tribunal does not
appear to be correct in law and in fact. It was imperative that by using
the registered logo belonging to other firm on their own product,
Respondent No. 1 fulfilled the purpose of indicating a relation between
F the products and the logo owner so as to influence the traC:e and therefore,
the provision of Explanation VIII were fully satisfied so far. as the
instant case was concerned. The finding of the Tribunal to the contrary
is wrong and hence set aside. (768-C, D, E]

1.3. The first respondent, a manufacturer of plywood classifiable
G under sub-heading 4408.90 of the Schedule to the Central Excise Tariff
Act, 1985 (5 of 1985) have contravened the provisions of Rules 9(1),
I 73B, 173C read with Section 4 of the Central Excise and Salt Act, 1944
and Rules 173F; 17,3G(2) read with Rules 52A and 226 of the Central
Excise Rules, 1944, by way of suppressing the material fact of use of
H brand/logo on their goods which is actually owned by the other firm,
C.C.E., CALCUTTA v. MIS. EMKA Y INVESTMENTS (P) LTD. [DR. LAKSHMANAN, J.] 763

a large-scale manufacturer of plywood, and thereby becoming ineligible A
for the .benefit of exemption granted under Notification No. 175/86-CE.
The goods so available in the market with the brand/logo of another firm
established a connection between the goods and the brand name holder
Q
without indicating the identity of that person which conforms to
Explanation VIII of the Notification. [768-F, G, H; 769-D) B
Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders,
(2004) 165 E.L.T. 481 (S.C.); Commissioner ofCentral Excise Chandigarh-
] v. Mahanna Dairis, (2004) 166 E.L.T. 23 (S.C.) and Commissioner of
Central Excise Chandigarh-Ilv. Bhalla Enterprises, (2004) 173 E.L.T. 225
(S.C.), relied on. C
Astra Pharmaceuticals (P) Ltd. v. Collector of Central Excise,
Chandigarh (1995) 75 E.L.T. 214 (S.C.), held inapplicable.

B.H.E.L. Ancillary Association v. Collector of Central Excise, (1990)
49 E.L.T. 33 (Mad.), approved. D
2. The respondents who are the manufacturers of plywood under
their own brand name are disentitled to the benefit of Small Scale
Industries Exemption Notification No. 175/86-CE by using logo indicating
logo of another firm on their product along with their own brand name.
[775-F) E
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2360-2361
of 1999.

From the Judgment and Order dated 9.6.98 of the Central Excise
Customs and Gold (Control) Appellate Calcutta in F.O. Nos. A-593-A 594/ F
CAL/98 in A. Nos. E-246, E-279 of 1992.

G.E. Vahanvati, Solicitor General, A. Subba Rao, Devadatt Kamat and
B. Krishna Prasad for the Appellant.

C. Hari Shanker, V.J. Francis and Anupan Mishra for the Respondents.
G

The Judgment of the Court was delivered by

-I DR. AR. LAKSHMANAN, J. : Both the above appeals are filed
against the common judgment passed by the Central Excise & Gold (Control)
H

•
764 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A Appellate Tribunal, Calcutta in Appeal Nos. E-246/92, E-279/92 and Order
..
No. A-593-594 CAL/98 dated 9:6.1998 reported in 2000(124)E.L.T.741.
Both the appeals are against the same and common impugned judgment.
Both the above appeals are being disposed of by this common judgment.

B Briefly stated, the facts of the case are as under:

The respondents-Mis Emkay Investments Private Limited and M/s
Plyking who are engaged in the manufacture of plywood classifiable under

C
sub-Heading 4408.90 of the Schedule Act, 1985. The said factory was
visited by the Central Excise Officers who found that the respondents are
also using the brand/logo "MERINO" along with the brand name "Pelican"
·-
on the plywood being manufactured by them and the officers of the
De'partment entertained a view that as the logo of"MERI_NO" is also being
shown on the plywood being manufactured by them, apart from their own
logo of "Pelican" and as the owner of the brand "MERINO" i.e. M/s.
D Merinoply and Chemicals Ltd., is a large scale manufacturer of plywood not
entitled to the benefit of small scale exemption Notification No. 175/86-CE
dated l .J.1986, as amended, the respondents were also not entitled to the
benefit of the said exemption Notification in view of clause 7 of the same.
The second respondent- M/s. Plyking is one of the traders from whose
premises plywood was seized by the officers of the Central Excise.
E
On adjudication, the Commissioner of Central Excise, Calcutta vide his
impugned order held that the logo indicating "MERINO" in a specific
manner was the brand name used by M/s. Merinoply and Chemicals Ltd.
Who were not eligible for the grant of benefit of Notification No. 175/86-
F CE and as such denied the benefit to the first respondent firm and accordingly
confiscated the seized plywood. The officers also confiscated 223 pieces of
plywood from the business premises ofM/s Plyking - the second respondent
herein. The respondents as appellants contended before the authorities that
though the word "MERINO" is written in the same style as written or. the
plywood manufactured by Mis Merinoply and Chemicals Ltd., nevertheless
G the same will not imply any relation of goods by the respondents under the
brand name of"MERINO". They also submitted that the brand name ofM/
s Merinoply and Chemicals Ltd. is "TUFFPLY" and "MERINO".

The Departmental represent~tives countered the arguments of the
H respondents by arguing that "MERINO" is the brand name and logo registered
C.C.E., CALCUTTA v. MIS. EMKA Y INVESTMENTS (P) LTD. [LAKSHMANAN, J.) 765

and owned by Mis Merinoply and the affixation of the same on the product A
would disentitle the respondents firms from the benefit of Notification in
terms of clause 7 read with Explanation VIII as Mis Merinoply and Chemicals
Ltd. being a large scale unit, are not entitled to the exemption Notification
No. 175/86-CE, clause 7 would be attracted and the respondents firms would
become ineligible for exemption. B

The Commissioner of Central Excise by his order dated 31.3.1992
ordered confiscation of seized goods. The respondents herein filed appeals
before the CEGAT against the order of the Commissioner. The CEGAT, by
the impugned order, allowed the appeal filed by the respondents herein.
Aggrieved by the said order, the appellants preferred these two appeals. C

We heard Mr. G.E. Vahanvati, learned Solicitor General, appearing for
the appellant and Mr. C. Hari Shankar, learned counsel, appearing for
respondent No. I. Respondent No.2 did not engage a lawyer to represent
their case. They sent their counter affidavit by post. D
The dispute, in the instant case, is as to whether the respondents who
are manufacturers of plywood under their own brand name "Pelicon" have
made themselves disentitled to the benefit of small scale exemption
Notification No.175/86-CE by using a logo indicating "MERINO" on their
products along with their brand name. The next question which arises is as E
to whether the markings or inscriptions should be considered as the brand
name of Mis Merinoply and Chemicals Ltd. and will come within the
mischief of Clause 7 read with Explanation VIII of the Notification, as
contended by the Department. Clause 7 reads as follows:
F
"The exemption contained in this Notification shall not apply
to the specified goods where a manufacturer affixes the specified
goods with a brand name or trade name (registered or not) of
another person who is not eligible for the grant of exemption under
this Notification."
G
Explanation VIII of Clause 7 reads as follows:

"Brand name" or "trade name" shall mean a brand name or
trade name whether registered or not, that is to say a name or a
mark, such as symbol, monogram, label, signature or invented word H
766 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A or writing which is used in relation to such specified goods for the
purpose of indicating, or so as to indicate, a connection in the
course of trade between such specified goods and some person
using such name or mark with or without any indic.ation of the
identity of that person."
B Mr. G.E. Vahanvati, learned Solicitor General, submitted that the
impugned goods admittedly contained the registered logo "MERINO"
belonging to and owned by M/s Merinoply and Chemicals Ltd. Thus it was
a clear case where the impugned goods were admittedly affixed with registered
logo/trade mark of the other person not eligible to S.S.I. exemption. According
C to the learned Solicitor General, the CEGAT erred in not appreciating that
to attract provision of clause 7 of Notification No.175/86-CE, it is sufficient
that product contained a trade mark/logo of another ineligible person which
was fully satisfied in the present case and whether the product also contained
a brand name/trade name/ logo of the manufacturer would not and cannot
D alter such position. Arguing further, learned Solicitor General, contended
th.at the interpretation of Explanation VIII as advanced by the Tribunal does
not appear correct in law and fact. It was imperative that by using the
registered logo "MERINO" belonging to M/s Merinoply and Chemicals Ltd.
on their own products, the first respondent herein, M/s Emkay Investments
Ltd. fulfilled the purpose of indicating a relation between the said products
E and the logo owner so as to influence the trade and, therefore, the provision
of Expla; -~tion VIII were fully satisfied so far as the present case was
concerned. ·.earned Solicitor General also submitted that the exception or
exempting p1,•vision in taxing statute should be construed strictly and does
not open to the Court or to the Tribunal to ignore conditions prescribed in
. ·p the exemption l' 'tification.

In support of I is submissions, learned Solicitor General, relied on the
following judgment:;:

l. B.HE.L. Ancillary Association v. Collector ofCentral Excise,
G (1990) 49 E.L.T. 33 (Mad.)

2. Commission -,. ofCentral Excise, Trichy v. Rukmani Pakkwell
Traders, (2004) 165 E.L.T. 48l(S.C.)

3. Commissioner of Central Excise, Chandigarh-Iv. Mahaan
H Dairies, (2004) 166 E.L.T. 23 (S.C.)
,<'
C.C.E., CALCUTTA v. MIS. EMKA Y INVESTMENTS (P) LTD. [LAKSHMANAN, J.] 767

4. Commissioner of Central Excise, Chandigarh-II v. Bhalla A
Enterprises, (2004) 173 E.L.T. 225 (S.C.)

Mr. Hari Shankar, learned counsel appearing for respondent No. I
submitted that clause 7 read with Explanation VIII of the Notification does
not make a registration or otherwise of the brand name or trade name, a
B
relevant factor and that it is not sufficient to find a portion of the symbol
or monogram of the other person on the product to oust them from the
benefit of Notification or to bring the goods within the ambit of Explanation
VIII. He would further argue that the Tribunal by a comparison of the
markings found that the same are entirely different except the use of the
word "MERINO" in between the respondents' own brand name and that the c
respondents' brand name "Pelican" has been clearly marked and their logo
in the shape and style - 'encircled Bird' - has been put c;m the product and
comparing the same with the markings put on their plywood by Mis Merinoply
and Chemicals Ltd .. It is found that apart from writing the word, "MERINO"
in a style, the said marking also uses the word, "TUFFPLY'' which is the
brand name of Mis Merinoply and Chemicals Ltd. Below the same, pictures
D1
of Boiling Water and Termite working on wood and sun, have been placed
to indicate that the ply in question is boiling water-proof, termite-proof and
weather-proof and that such markings are not found on the products
manufactured by the respondents firms. Submitting further, learned counsel
appearing for respondent No. l contended that the brand name as defined E
in Explanation VIII of the Notification will not create an impression in the
mind of the purchaser that the product is that ofM/s Merinoply and Chemicals
Ltd. and that the use of markings as indicated above by the respondents
cannot be said to indicate any connection in the course oftrade between such
specified goods and M/s Merinoply and Chemicals Ltd.
F
Learned counsel appearing for respondent No. I further submitted that
the "Pelican" brand and "Pelican" logo had no visual or phonetic similarity
with "MERINO" logo in style and the said mark also uses the word
"TUFFPL Y" which is the brand name of M/s Merinoply and Chemicals Ltd.
The same contention was made in the counter affidavit filed by Mis plyking, G
respondent No.2 herein.

Learned counsel appearing for respondent No.1, in support of his
contentions, placed reliance on the judgments in Commissioner of Central
Excise, Chandigarh-II v. Bhalla Enterprises (Supra) and in Astra
H
768 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A Pharmaceuticals (P) Ltd. v. CollectorofCentral Excise, Chandigarh, (1995)
75 E.L.r1.'. 214 (S.C.).

We have carefully considered the rival submissions made by counsel
appearing on either side.
B
The impugned goods admittedly contained a registered logo "MERINO"
belonging to and owned by M/s Merinoply and Chemicals Ltd. Thus it was
a clear case where the impugned goods were admittedly affixed with registered
logo/trade mark of other person not eligible to S.S.I. exemption.

C We have gone through the common order passed by the Tribunal. In
our view, the Tribunal has erred in not appreciating that to attract provision
of clause 7 of Notification No. 175/86-CE, it is sufficient that product
contained a trade mark/logo of another ineligible person which was fully
satisfied in the instant case and whether the product also contained the brand
D name/trade name/logo of the manufacturer would not and cannot alter such
position. Likewise, the interpretation of Explanation VIII as advanced by
the Tribunal does not appear to be correct in law and in fact. It was
imperative that by using the registered logo "MERINO" belonging to Ml
s Merinoply and Chemicals Ltd. on their own product Mis Emkay Investment
Ltd. fulfilled the purpose of indicating a relation between the said products
E and the logo owner so as to influence the trade and therefore, the provision
of Explanation VIII were fully satisfied so far as the case on hand was
concerned. The finding of the Tribunal to the contrary, in our opinion, is
wrong and liable to be set aside.

F The first respondent M/s Emkay Investment Pvt. Ltd., a manufacturer
of plywood in the brand name of"MERINO" classifiable under sub-Heading
4408.90 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1985)
have contravened the provisions of Rules 9(1), l 73B, l 73C read with
Section 4 of the Central Excise and Salt Act, 1944 and Rules l 73F, 1730(2)
read with Rules 52A and 226 ofthe Central Excise Rules, 1944, by way of
G suppressing the material fact of use of "MERINO" brand/logo on their said
goods which is actually owned by Mis Merinoply and Chemicals Ltd., a
large scale manufacturer of plywood, having annual clearance value of more
than Rs. 2 crores and thereby becoming ineligible for the benefit of exemption
granted under Government of India, Notification No. 175/86-CE dated
H 1.8.1986, as could be seen from the notice of show cause issued to the
C.C.E.,CALCUTTA v. MIS. EMKA Y INVESTMENTS (P)LTD. [LAKSHMANAN,J.] 7(J9

respondents on 4.9.1991. We, therefore, hold that M/s Merinoply and A
Chemicals Ltd., owns the said "MERINO" brand/logo and, therefore, the
plywood containing the imprint of such registered "MERINO" brand/logo
were not eligible for grant of benefit as per terms and conditions of the said
Notification No. 175/86-CE dated l.3.1986 during the material period. The
said Company never disputed the fact that "MERINO" brand/logo belonged B
to the said Mis Merinoply and Chemicals Ltd., a large scale manufacturer
of plywood who are not entitled to the grant of exemption benefit as per
the above Notification. In reply to the show cause notice and at the time of
personal hearing, the respondents never disputed the fact of using the word
"MERINO" on their said goods in addition to other particulars. They
contended that the same was used only to indicate that the quality was C
similar to a particular type of plywood.

We also hold that the goods so available in the market.with "MERINO"
brand/logo established a connection between the said goods and the brand
name holder in the course of raids without indicating the identity of that D
person i.e. the said Assam Company which conforms to Explanation VIII
of the said Notification.

In our opinion, the judgment of the Tribunal is wrong and against the
ratio laid down in the cases referred to inji-a. In the case of Commissioner
of Central Excise, Trichy v. Rukmani Pakkwell Traders (supra), the E
respondents purchased the scented supari in bulk from M/s ARR Nutcon
Products. The scented supari is marked under the brand name of "ARR" with
a photograph of Shri A.R. Ramaswamy, the founder of ARR group of
Companies. The respondents claimed benefit of Notification No. I /93-C.E.,
dated 28.2.1993. The said Notification grants exemption, amongst others, F
to scented supari. Clause 4 of the Notification provides that the exemption
contained in the Notification shall not apply to specified goods bearing a
brand name or trade name of another person. The respondents were issued
show cause notice that their goods are not exempted under the said
Notification. The Assistant Collector confirmed the demand on the ground
that they were not eligible to get exemption under the Notification. The G
appeal filed by the respondent was also dismissed by the
Commissioner(Appeals). However, the Tribunal allowed the appeal of the
respondents. The Commissioner of Central Excise preferred civil appeal to
this Court which was allowed by this Court. S.N. Variava,J. speaking for
the Bench held as under: H
770 SUP~EME COURT REPORTS [2004] SUPP. 6 S.C.R.

A "In our view, this Circular has no application to the facts of
the present case. What the Circular clarifies is that ifthere are more
than one registered owners in respect of the same trade mark then
merely because the other person has the same registered mark in
some other goods would not preclude the owner of the trade mark
from getting the benefits of the circular. In this case, admittedly,
B
the respondents are not owners of the trade mark "ARR". They do
not claim to have any rights in the photograph of the founder of
the group. Therefore, reliance by' the Tribunal on this circular is
entirely erroneous.

c The Tribunal then proceeds on the basis that the exemption
can be denied only if trade mark or brand name is used in respect
of the same goods for which the trade mark is registered. In coming
to this conclusion, we are afraid that the Tribunal has done something
which is not permissible to be done in law. It is settled law that
D Exemption Notifications have to be strictly construed. They must
be interpreted on their own wording. Wordings of some other
Notification are ofno benefit in construing a particular Notification. ·
Clause 4 of this Notification and the explanation (set out hereinabove)
make it clear that the exemption will not apply if the specified
goods (i.e. scented supari) bears a brand or trade name of another
E person. Neither in Clause 4 of the Notification nor in Explanation
IX is it provided that the specified goods must be the same or
similar to the goods for which the brand name or trade name is
registered. The Tribunal has in adopting the above reasoning
effectively added to the Notification words to the effect "brand
F name or trade name in respect of the same goods". This is clearly
impermissible. It is to be seen that there may be an unregistered
brand name or an unregistered trade name. These might not be in
respect ofany particular goods. Even ifan unregistered brand name
or trade name is used the exemption is lost. This makes it very clear
that the exemption would be lost so long as the brand name or trade
G name is used irrespective of whether the use is on same goods as
those for which the mark is registered.

The Tribunal had also held that under the Notification the use
must be of "such brand name". The Tribunal has held that the words
H "such brand name" shows that the very same brand name or trade
C.C.E., CALCUTTA '" M/S. EMKA Y INVESTMENTS (P) LTD. [LAKSHMANAN, J.) 771

name must be used. The Tribunal has held that if there are any A
differences then the exemption would not be lost. We are afraid tl}at
in coming to this conclusion the Tribunal has ignored Explanation
IX. Explanation IX makes it clear that the brand name or trade name
shall mean a brand name or trade name (whether registered or not)
that is to say a name or a mark, code number, design numb~r, B
drawing number, symbol, monogram, label, signature or invented
word or writing. This makes it very clear that even a use of part
of a brand name or trade name, so long as it indicates a connection
in the course of trade would be sufficient to disentitle the person
from getting exemption under the Notification. In this case
admittedly the brand name or trade name is the words "ARR" with C
the photograph of the founder of the group. Merely because the
registered trade mark is not entirely reproduced does not take the
respondents out of Clause 4 and make them eligible to the benefit
of the Notification."
D
In the case of Commissioner ofCentral Excise, Chandigarh-Iv. Mahaan
Dairies (supra), the appeal was filed before this Court by the Commissioner
of Central Excise, Chandigarh. The question in this case before the Tribunal
was whether the respondents are entitled to exemption of Notification No.8/
98.C.E. dated 2.6.1998 under which certain goods were exempted froip.
payment of excise duty. However, the exemption was not available if the E
goods bore a brand name or trade name (whether registered or not) of
another person. S.N.Variava,J., speaking for the Bench, _observed as under:

"However, the respondents also sell pickle with the name
"Mahaan" written in exactly the same style as a registered trade F
mark of other Company. The question would be whether by adding
the words "Taste maker" the respondents could get the benefit of
the Notification.

We have today delivered a judgment in Commissioner of
Central Excise, Trichy v: Rukmani Pakkwell Traders (2004) 165 G
E.L.T. 481 (S.C.) (Civil Appeal Nos. 3227-322811998) wherein we
have held in respect of another Notification containing identical
words that it makes no difference whether the goods on which the
trade name or mark is used are the same in respect of which the
trade mark is registered: Even if the goods are different so long as H
772 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A the trade ,name .or brand name of some other Company is used the
benefit of the Notification would not be available. Further, in our
view, 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.
B
Such a view has been taken by the Tribunal in the <;ase of Festo
Controls (P) Ltd. v. CCE, Bangalore, (1994) 72 E.L.T. 919. We
approve that decision.

It is settled law that in order to claim benefit of a Notification
c a party must strictly comply with the terms of the Notification. If
on wordings of the Notification the benefit is not available then by
stretching the words of the Notification or by adding words to the
Notification benefit cannot be conferred. The Tribunal has based
its decision on a decision delivered by it in Rukmani Pakkwell
D Traders v. CCE, Trichy, (1999) 109 E.L.T. 204. We have already
overruled the decision in that case. In this case also we hold-,.the
decision of the Tribunal is unsustainable. It is accordingly set
aside."

Commissioner of Central Excise, Chandigarh-II v. Bhalla Enterprises
E (supra): This case was relied on by both the parties. This is also a case of
some brand name used by different persons. The Division Bench, in this
case, have also followed the judgments of this Court in the case of
Commissioner ofCentral Excise, Trichy v. Rukmani Pakkwell Traders (supra)
and Commissioner of Central Excise, Chandigarh-Iv. Mahaan Dairies and
F observed that clause 4 of the Notification read with Explanation IX, in that
case, clearly debars those persons from the benefit of the exemption who
use someone else's name in C<?!1!1ection with their goods either with the
intention of indicating or in a manner so as to indicate a connection between
the assesses goods and such other person. Paragraph 6 of the judgment will
be useful for our purpose which is reproduced as under:
G
"The apprehension of the assesses that they may be denied the
exemption merely because some other traders even in a remote area
of the country had used the trade mark earlier is unfounded. The
notification clearly indicates that the assessee will be debarred only
if it uses on the goods in respect of which exemption is sought, the
C.C.E., CALCUTTA v. MIS. EMKA Y INVESTMENTS (P) LTD. [LAKSHMANAN, J.] 773

same/similar brand name with the intention ofindicating a connection A \
with the assesees' goods and such other person or uses the name
in such a manner that it would indicate such connection. Therefore,
if the assessee is able to satisfy the assessing authorities that there
was no such intention or that the user of the brand name was.
B
.. entirely fortuitous and could not on a fair appraisal of the marks
indicate any such connection, it would be entitled to the benefit of
I
exemption. An assessee would also be entitled to the benefit of the
/,
I. ~
exemption ifthe brand name belongs to the assessee himselfalthough
someone else may be equally entitled to such name."

Astra Pharmaceuticals (P) Ltd. v. Collector of Central Excise, C
Chdndigarh (supra) : This judgment will not be of any assistance to the case
on hand. It is distinguishable on facts and on law. Since it does not apply
to the case on hand, we are not inclined to consider the same.

Learned Solicitor General argued that exception or exempting provision
in taxing statute should be construed strictly. For the said proposition, we D
can safely and beneficially rely on the recent judgment pronounced on dated
l 7.11.2004 in C.A. No. 7994 of 2003 (State of Jharkhand & Ors. v. Ambay
fements & anr.) by a Bench ofS.N. Variava, Dr. AR. Lakshmanan & S.H.
Kapadia, JJ. It is useful to reproduce paragraphs 25,26 & 27 of the judgment
which read as under: E
"In our view, an exception or an exempting provision in· a
taxing statute should be construed strictly and it is not open to the
Court to ignore the conditions prescribed in the Industrial Policy
and the exemption Notifications.
F
In our view, the failure to comply with the requirements
renders the writ petition filed by the respondent liable to be dismissed .
. While mandatory rule must be strictly observed, substantial
compliance might suffice in the case of a directory rule.

Whenever the statute prescribes that a particular act is to be G
done in a pat:ficular manner and also lays down that failure to
comply with the said requirement leads to severe consequences,
such requirement would be mandatory. It is the cardinal rule of the
interpretation that where a statute provides that a particular thing
should be done, it should be done in the manner prescribecl dnd not H
774 SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.

A in any other way. It is also settled rule of interpretation that where
a statute is penal in character, it must be strictly construed ~nd
followed. Since the re4uirement, in the instant case, of obtaining
prior permission is mandatory, therefore, non-compliance of the
same must result in canceling the concession made in favour of the
grantee-the respondent herein."
B
B.H.E.L. Ancillary Association v. Collector of Central Excise (supra):
This judgment was relied on by the learned Solicitor General in support of
his contention. The very same Notification No. 175/86-CE dated 1.3.1986
was the subject matter of the said case which accords exemption to goods
C produced by small scale industrial undertakings. The units of which the
petitioners are. the Associations, and which Units are ancillary to Bharat
Heavy Electricals Limited have fabricated certain components required by
BHEL. In respect of such components manufactured by the Units, exemption
was asked for as· per the Notification. The exemption was not accorded to
D the Units, on the ground that clause 7 read with Explanation VIII of the
Notification is attracted to the components manufactured by the Units. This
conte~tion was accepted by the learned single Judge, who opined that certain
stencil marks on the components manufactured by the Units made by them
would make the components, though manufactured by the Units, as having
a
been affixed with brand name or a trade name of BHEL which is not
E eligible for the grant of exemption under the Notification within the meaning
of clause 7 read with Explanation VIII of the Notification. This construction
of the learned single Judge was the subject matter of the challenge in the
writ appeals. The Bench observed as follows:

F " ...... The name or mark is equated to symbol, monogram,
label, signature or invented word or writing. But a mere finding of
symbol, monogram etc., on the goods would not bring the matter
within Explanation VIII, so as to fall within the exception to the
exemption set out in clause 7 to the Notification. Something more
is required by Explanation VIII and that is, the ab~ve markings
G must have been used in relation . . go'ods
. to the specified _, for the
purpose of indicating or so as to indicate a connection in the course
· '<>ftrade between such specified goods and ~HEL using such name
or hY.1rk with or without a·ny indication of the identity of BHEL.
Here, there is no symbol, no monogram, no label and no signature
H <if any nature much less of BHEL found on the components
C.C.E., CALCUTT Av. M/S. EMKA Y INVESTMENTS (P) LTD. [LAKSHMANAN, J.] 77 5

manufactured by the Units. The markings or inscriptions found on A
the components may amount to invented words or writings. But the
markings or inscriptions have not been and are not being used by
BHEL at all. They have been used and are being used by the Units
and Units alone, may be pursuant to the contractual requirements
between BHEL and the Units even as per the averments in the B
counter affidavit ofrespondents 1to3. The markings or inscriptions,
individually or cumulatively do not go to constitute a name or a
.,j
mark such as symbol, ~onogram :
etc.
.
of BHEL, used by BHEL in
·I
relation to the components manufactured by the Units. They may
have a purpose to serve. But certainly they do not by themselves
constitute a name or mark used by BHEL. But the stress, which we c
could spell out cumulatively from the language used in Explanation
VIII, is that the name or mark such as symbol, monogram e·tc.
should have been used by BHEL for the purpose of indicating or
so as to indicate a connection in the course of trade between the
components and BHEL using such name or mark. It is true that by
D.
a bare looking at the inscriptions or markings or by a bare visual
inspection, there need not be an indication of the identity ofBHEL.
But fundamentally these markings or inscriptions do not go to
constitute a name or mark of BHEL; much less used by BHEL in
relation to such components. There is a faltering with regard to the
satisfaction of the primary ingredient required by Explanation VIII." E

Accordingly the High Court allowed the appeals and set aside the order
of the learned single Judge.

For the foregoing reasons, we allow the appeals and set aside the order p
dated 9.6.1998 passed by the CEGA T impugned in these appeals and answer
the issues involved in favour of the appellant and hold that the respondents
who are the manufacturers of plywood under their own brand name Mis
Pelican are dise"ntitled to the benefit of small scale exemption Notification
No.175/86-CE dated 1.3.1986 by using logo indicating "MERINO" on their
product along with their brand name. G

However, in the' facts and circumstances of the case there glfall be no
'
order as to ·costs.

S.K.S. Appeals allowP4. H