Holding

The use of another company's name on the product to indicate a connection constitutes a "brand name or trade name" under Notification No. 5/98‑CE, disqualifying the assessee from the exemption.

Summary

The Commissioner of Central Excise appealed against a judgment of the Central Excise, Customs and Gold (Control) Appellate Tribunal (CEGAT) which had allowed Mis. Grasim Industries Ltd., a subsidiary, to claim exemption under Notification No. 5/98‑CE. The subsidiary printed on its cement bags the words "Manufactured by Dharani Cements Ltd. A Subsidiary of Grasim Industries Ltd" to indicate a connection with the well‑known parent company. The Supreme Court examined whether such use of another company's name constitutes a "brand name or trade name" within the meaning of the notification, thereby disqualifying the assessee from the exemption. Relying on the explanatory clause that the terms are qualified by "that is to say" and include any name, mark or writing used to indicate a connection, the Court held that the usage indeed falls within the definition and the exemption does not apply. While the Court restored the Commissioner’s order denying the exemption, it deleted the penalty imposed under Rule 173Q as the Tribunal’s view on penalty was untenable. The appeal was therefore disposed of, with the exemption denied but no penalty imposed.

Issues considered

The meaning of "brand name or trade name" in Notification No. 5/98‑CE and whether the name of another company used to indicate a connection falls within this definition.
Whether the Tribunal erred in interpreting the notification to allow the exemption to the assessee.
Whether a penalty under Rule 173Q can be imposed when the exemption is denied.

Legislation cited

Subjects

central exciseexemption notificationbrand nametrade namepenaltyRule 173Qinterpretation of notificationsubsidiarytrademark

Judgment

~

A COMMISSIONER OF CENTRAL EXCISE, TRICHY
v.
MIS. GRASIM INDUSTRIES LTD.

APRIL 12, 2005

B [S.N. VARIAVA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.]

~
Central Excise Act, 1944; Section 173Q, Notification No. 5198-CE dated
'
2. 6.1998 issued thereunder : -1=
__,
c Exemption Notification-Applicability of-Held: Name of a well-known
L..;,.._
~-
cement company was written on the product with the intention of showing a I.
connection between the product and the company in the course of trade-It
is not necessary that the name or the writing on the pro.duct must always be r
a brand name or a trade nature in the sense that it is normally understood- 1---

D Hence assessees not entitled to the benefit of the Notification.

Words and Phrases :

'that is to say '-Meaning of in connection with the applicability of -----
___._._
\,

Notification No. 5198 CE.
E Respondent/assessee is a subsidiary company of one Mis. Grasim
Industries Ltd., the main company. The company using the name of the
main company on the cement bags manufactured by them and claimed .it
benefit under Notification No. 5/98 CE. The Revenue held that assessee ...J--
was not entitled to the benefit of the Notification. Assessee filed an appeal
F which was allowed by the Tribunal. Hence the present appeal. I
r
Disposing of the appeal, the Court /:-
!
~
HELD : 1.1. There is no denial that Mis. Grasim Industries Ltd. were
manufacturer of cement. There is also no denial that the purpose of using
•
(
G the trade name of other company was with an intention of indicating a
connection between the product and Mis. Grasim Industries Ltd. In such __....
cases, clearly the assessees were using a trade name of some other company I
;'
with the purpose of indicating a connection in the course of trade between
the product and that person. The Respondents were therefore clearly not

H 466
C.C.E., TRICHY v. GRASIM INDUSTRIES LTD. 467

entitled to the benefit of the Notification. The decision of the Tribunal is A
therefore clearly erroneous. 1474-H; 475-A-BI

Astra Pharmaceuticals (P) ltd. v. Collector of Central Excise,
Chandigarh, reported in (1995) 75 ELT 214 SC, distinguished.

1.2. It is not necessary that the name or the writing must always be B
a brand name or a trade name in the sense that it is normally understood.
The exemption is only to such parties who do not associate their products
with some other person. Of course this being a Notification under the
Excise Act, the connection must be of such a nature that it reflects on the
aspect of manufacture and deal with quality of the products. No hard and C
fast rule can be laid down however it is possible· that words which merely
indicate the party who is marketing the product may not be sufficient.
(477-F-G-HI

1.3. The words "that is to say" qualify the words "brand name or
trade name" by indicating that these terms must therefore be understood D
in the context of the words which follow. The words which follow are of
wide amplitude and include any word, mark, symbol, monogram or label.
Even a signature of an invented word or any writing would be sufficient
if it is used in relation to the product for purpose of indicating a connection
between the product and the other person/company. [478-A-B)
E
Nippa Chemicals (P) Ltd. v. Collector of Central Excise, Madras,
reported in (1998) 100 ELT 490 and Commissioner of Centra( Excise,
Hyderabadv. Sarat Electronics, reported in (2004) 167 ELT 404, overruled ..

Royal Hatcheries Pvt. Ltd v. State of A. P., (1994) Supp 1 SCC 429
and Collector of Central Excise, Goa v. Christine Haden(/) Pvt. Ltd, (1999) F
113 ELT 591, referred to.

1.4. The Explanation to the Notification makes it clear that it need
not be a trade na{lle or brand name as commonly understood. Any name
or mark or writing, even the name of a company is sufficient so long as it
is used for the purpose of indicating a connection between the product G
.l-- and that Company. (479-C-D]

2. While the conclusions of the Commissioner/Revenue that the
assesses were not entitled to the benefit of the Notification are correct,
the fact still remains that the Tribunal has in a number of matters given
an interpretation as understood by the assessees. It, therefore, cannot be H
468 SUPREME COURT REPORTS [2005] 3 S.C.R.

A said that the assesses could nof have taken the view they did. Thus, this is
a case where penalty should not be imposed. Hence, imposition of penalty
on the assessee is deleted. (479-F-Gl

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2348-2349
of 2000.
B
From the Judgment and Order dated 14.10.99 of the Central Excise,
Customs and Gold (Control) Appellate Tribunal, Chennai in F.O. No. 2630/
99 and Stay Order No. 1626/99 in A. No. E/St/655/99 and E/1404of1999.

Rajiv Dutta, Hemant Sharma, S. Beno Beneigar, P. Parmeswaran, B.
C Krishna Prasad with him for the Appellant.
Joseph Vellapally, Muthuvenkatrarrian, S: Nan<;Ja Kumar, Anuj Chauhan,
V. Vijayan, V.N. Raghupathy, P.N. Ramalingam (NP) with him for the
Respondent.

D The Judgment of.the Court was delivered by

S.N. VARIA VA, J. These Appeals are filed against the Judgment of
the Customs, Excise and Gold (Control) Appellate Tribunal (CEGA T) dated
14th October, 1999. The Respondents are a subsidiary of one Mis Grasim
E Industries Ltd. On the bags of cement manufactured by them the Respondents
use the following words :

"Manufactured by Dharani Cements Ltd.
A Subsidiary of Grasim Industries Ltd."

The Tribunal has, following the earlier Judgments of the Tribunal in
F the cases of Chemguard Coatings Pvt. Ltd v. Commissioner of Central Excise,
Chennai, reported in (2000) 116 EL T 43 and Nippa Chemicals (Pvt.) Ltd v.
Collector of Central Excise, Madras, reported in (1998) 100 ELT 490, and
a Judgment of this Court in the case of Astra Pharmaceuticals (P) Ltd v.
Collector of Central Excise, Chandigarh, reported in (1995) 75 ELT 214 SC,
G- held that the benefit of Notification No. 5198 c~ dated 2nd June, 1998 is not
lost by the Respondents because they show on their product the name of the
holding company, namely Mis. Grasim Industries Ltd.

For a consideration of these Appeals, it is first necessary to set out
Notification 5/98 CE dated 2nd June, 1998, which reads as follows :
H
C.C.E., TRICHY v. GRASIM INDUSTRIES LTD. [S.N. VARIAVA, J] 469

"Notification No. 5/98-C.E., dated 2-6-1998 A
Effective rate of duty for specified goods of Chapters 13 to 96.

In exercise of the powers conferred by sub-section (I) of section SA
of the Central Excise Act, 1944 (1of1944), the Central Government,
being satisfied that it is necessary in the public int~est so to do, B
hereby exempts excisable goods of the description specified in column
(3) of the Table below or column (3) of the said Table read with the
relevant List appended hereto, as the case may be, and falling with
the Chapter, heading No. or sub-heading No. of the Schedule to the
Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to
as the said Schedule), specified in the corresponding entry in column C
(2) of the said Table, from so much of the duty of excise leviable
thereon which is specified in the said Schedule, as is in excess of the
amount calculated at the rate specified in the corresponding entry in
column (4) of the said Table, subject to the relevant conditions
specified in the Annexure to this notification, and referred to in the D
corresponding entry in column (5) of the said Table.

Explanation. - For the purposes of this notification, the rate specified
in column (4), is ad valorem rate, unless otherwise specified.

TABLE
E
S.No. Chapter Description Rate Conditions
or heading of goods
No. or
sub-heading
No.
(I) (2)
F
(3) (4) (5)
l. 13 Lac Nil -

9. 2502.29 All goods Rs. 2 2
manufactured in. per G

-- Factory using vertical
shaft kiln, with installed
(I) capacity certified as not
tonne

exceeding 300 tonnes per
day or 99,000 tonnes per H
..,
470 SUPREME COURT REPORTS [2005] 3 S.C.R.

A annum and the total
clearances of cement
produced by the factory, in
a financial year, shall not
exceed 1,09,500 tonnes;
factory using rotary kiln,
B • with installed capacity (II)
certified as not exceeding
600 tonnes per day or
1,98,000 tonnes per anum
and the total clearances of
c the cement produced by
the factory, in a financial
year, shall not exceed
2,20,000 tonnes.
Condition No. Conditions
D I. If the manufacturer of the food preparations produces a certificate
from an officer not below the rank of a Deputy Secretary to the
Govern.ment of India or not below the rank of a Deputy Secretary
to the State Government concerned to the effect that such food
preparations have been distributed free to the economically weaker
sections of the society under a programme duly approved by the
E Central Government or the State Government concerned, within
five months from the date of clearance of such gods or within
such further period as the Assistant Commissioner of Central
Excise may allow in this regard ..
2. If the cement manufacturer produces to the Assistant (i)
F Commissioner of Central Excise a certificate issued by an officer
not below the rank of Director of Industries in the State
Government indicating the installed capacity of the factory.
The explanation under this notification shall be (ii) applicable
upto a maximum quantity of ninety-nine thousand tones in a
G financial year. For computing the quantity of ninety-nine thousand
tonnes in a financial year, the clearances of cement effected
under any other notification shall be included. However, the
clearances of cement effected on payment of duty at the rate of
Rs. 350 per tonne shall not be taken into account forcomputing
the above mentioned quantity of ninety-nine thousand tonnes.
H
C.C.E., TRI CHY v. GRASIM INDUSTRIES LTD. [S.N. VARIAVA, J.] 471
The exemption under this notification shall not be (iii) applicable A
to, cement manufactured from such clinker which is not (a)
manufactured within the same factory and
(b) cement bearing a brand name or trade name (whether
registered or not) of another person;
Explanation. - For the purpose of condition (ii), "brand name" or B
"trade name" means a brand name or trade name, whether
registered or not, that is to say, a name or a mark, such as a
symbol, monogram, signature, or invented words or any writing
which is used in relation to a product for the purpose of indicating,
or so as to indicate, a connection in the course of trade between C
the product and some person using such name or mark with or
without any indication of the identity of that person."

The Appellants contended that the Respondents were using the name of
M/s. Grasim Industries Ltd. with the purpose of indicating a connection
between the product i.e. the cement manufactured by them, and M/s Grasim D
Industries Ltd. which is a well known cement manufacturer. In reply, it has
not been denied that M/s. Grasim Industries Ltd. is a well known cement
manufacturer. It has also not been denied that the purpose of putting the
name "M/s. Grasim Industries Ltd." was to show a connection between the
product and Mis. Grasim Industries Ltd. However, what has been contended
is that the words "Mis. Grasim Industries Ltd." are neither a brand name nor E
a trade name. It is contended that mere use of the name of a company does
not amount to using a brand name or trade name of some other cc.npany.

The Commissioner, by his Order dated 19th May, 1999, held that the
Respondents were not entitled to the benefit of the Notification. It was held F
that they were liable to pay a differential duty of Rs. 47,74,961 and a penalty
of Rs. I 0,00,000 ·under Rule l 73Q of the Central Excise Rule, 1944. The
Respondents filed an Appeal before the CEGA T which, as stated above, has
been allowed on the basis of Judgments referred to earlier.

Apart from the Judgments relied upon by the Tribunal, some other G
Judgments of the Tribunal, taking a similar view, have also been cited before
us. It was submitted by Mr. Vellapally, on behalf of the Respondents, that
based on the Judgment of this Court in Astra Pharmaceuticals (P) Ltd. 's case
(supra) the Tribunal has consistently been holding that the benefit of such
Notification is not lost by use of the name of a company. It was submitted
that most of the Judgments of the Tribunal were not appealed against by the H
472 SUPREME COURT REPORTS [2005) 3 S.C.R.

A Department. It was submitted that as no Appeal had been filed against those
Judgments, the Department should not be allowed to discriminate by filing
an Appeal in this case.

In support of this submission reliance was placed upon the Judgment
of this Court in the case of Berger Paints India Ltd. v. Commissioner of
B Income Tax, Calcutta, reported in (2004) 165 ELT 488 SC, wherein this
Court has held that if the Revenue has not challenged the correctness of the
Jaw laid down earlier and accepted it in the case of one assessee then it is not
open to the Revenue to challenge the correctness in other cases without a just
cause.
c Reliance was also placed upon an unreported Judgment passed in the
· case of Suptd. Of Central Excise v. D.C.I. Pharmaceuticals Pvt. Ltd., in Civil
Appeal No. 6862 of 1999 dated 22nd February, 2005. However, in this case,
we find that the Court refused to interfere because there was an earlier
Judgment which had not been challenged in the case of concerned assessee
D itself.
We find some substance in this submission. However, Mr. Dutta points
out to us .that no Affidavit in Reply had been filed in these Appeals. He
submits that no such contention had been taken in advance. He states that he
is therefore not in a position to make a statement as to whether or not
E Appeals were filed against the various Judgments of the Tribunal shown to
this Court. He submits that time should be given to him in order to find out
whether Appeals were filed or not.

This contention was taken up by Mr. Vellapally .after a full day of
argument and only after finding that this Court was against him on merits. It
F is not just a legal submission but is based on a factual ~ituation which would
require checking. After a full hearing this Court is not going to adjourn this
case. As no such contention was taken earlier by filing any Affidavit in Reply
we do not propose to dismiss these Appeals on this ground. Even otherwise,
we find that in all Judgments, relied upon, the Tribunal has taken a patently
G erroneous view. It becomes necessary for this Court to cJarify the law so that
the erroneous Judgments of the Tribunal do not remain b_inding precedents.

The Judgments of the Tribunal appear to be based upon the Judgment
of this Court in Astra Pharmaceuticals Ltd.' case (supra). Even in the impugned
Judgment Astra Pharmaceuticals Ltd. 's case has been relied upon. In our
H view, the Tribunal is misconstruing and misunderstanding the Judgment of
C.C.E., TRI CHY v. GRASIM INDUSTRJES LTD. [S.N. VARIA VA, J.) 473

this Court in Astra Pharmaceuticals ltd. 's case. A
In Astra Pharmaceuticals ltd. 's case the question was whether the
Appellants (therein) were liable to pay duty on Dextrose Injection
manufactured by it under Tariff Item l4E. The said Tariff Item read as
follows :
B
Tariff Description of Goods Rate of du!Y
Item No. Basic Special
Excise
l4E Patent or Proprietary 12-l/2% 10% of
Medicines not containing Adv. the basic
alcohol, opium, Indian Hemp duty
c
or other narcotic drugs or chargeable
other narcotics other than
those medicines which are
exclusively ayurvedic, unani,
sidha or homoeopathic. D

Explanation : I

"Patent or proprietary medicines" means any drug or medicinal
preparation, in whatever form, for use in the internal or external E
treatment of, or for the prevention of ailments in human beings or
animals, which bears either on itself or on its container or both, a
name which is not specified in a monograph in a Pharmacopoeia
Formulary or other publications notified in this behalf by the Central
Government in the Official Gazette, or which is a brand name, that
is a name or a registered trade mark under the Trade and Merchandise F
Marks Act, 1958 (43 of 1958) or any other mark such as a symbol,
monogram, label, signature or invented words or any writing which
is used in relation to that medicine for the purpose of indicating or
so as to indicate a connection in the course of trade between the
medicine and some person, having the right either as proprietor or G
otherwise to use the name or mark with or without any indication of
the identity of that person.

Explanation : II.

'Alcohol', 'Opium', "Indian Hemp'', "Narcotic Drugs" and 'Narcotics'
have the meanings respectively assigned to them in Section 2 of the H
474 SUPREME COURT REPORTS (2005] 3 S.C.R.

A Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of
1955)."

To be immediately noted that in Astra Pharmaceuticals ltd. 's case this Court
was considering the phrase "Patent or proprietary medicines". In our case
and the other cases earlier dealt with by the Tribunal the phrase under
B consideration is "brand name or a trade ·name". The subject matter of Tariff
Item 14E and the Notifications being considered are completely different.
Whilst interpreting the phrases "brand name or trade name" an interpretation
given in respect of "Patent or proprietary medicines" can be of no assistance.
Even otherwise, there is a considerable difference between the Explanation
C to Tariff Item 14E and the Explanation in the concerned Notification. The
explanation to Tariff Item 14E provides that the patent or proprietary medicine
must, amongst other things, be a brand name i.e. a name or a registered trade
mark under the Trade and Merchandise Marks Act. In the Explanation under
consideration the "brand name or a trade name" may be registered or
unregistered. The registration need not be only under the Trade and
D Merchandise Marks Act. Undoubtedly, the words "any other mark such as a
symbol, monogram, label, signature or invented words or any writing which
is used in relation to that medicine for the purpose of indicating or so as to
indicate a connection in the course of trade between the medicine and some
person'" are almost identica~. But in the Explanation to Tariff Item 14E they
E are used in the context of a "Patent and proprietary medicine" which must be
a name or a registered trade mark under the Trade and Merchandise Marks
Act. In the ExpJanation to the concerned Notifications these words are used
in the cont~xt of a. "Brand name or a trade name". These words, when used
in the context of a "Patent or a proprietary medicine" assume a completely
different context from that when they are used in the context of a "Brand
F name or a trade name" which may be registered or not. Further, the Explanation
to Tariff Item 14E nowhere uses the words "trade name". As is commonly
known, a trade name can be a name in which or by which a person or body
carries on their trade. It would, if the context so permits, include the name
of a company. In the context of a "trade name" the words "a name" and "~r
any writing" would cover the name of a company so long as it is used in
G relation to the product and is used for the purpose of indicating a connection
in the course of a trade between the product and other person.

As has been set out hereinabove, in this case there is no denial that Ms.
Grasim Industries Ltd. were manufacturer of cement. There is also no denial
H that the purpose of using the words :
C.C.E., TR!CHY v. GRASIM INDUSTRIES LTD. [S.N. VARIA VA, J.] 475

"Manufactured by Dharani Cements Ltd. A
A Subsidiary of Grasim Industries Ltd."

was with an intention·of indicating a connection between the product i.e. the
cement and Mis Grasim Industries Ltd. In such cases, clearly the Respondents
were using a trade name of some other company with the purpose of indicating
a connection in the course of trade between the pfClrluct ilnd that person. The B
Respondents were therefore clearly not entitled to the benefit of the
Notification. The decision of the Tribural is therefore dearly erroneous and
requires to be set aside.

Reference was made to certain decisions of the Tribunal which are now C
required to be taken note of.

In the case of Nippa Chemicals (Pvt.) ltd 's case (supra) the question
was whether the Appellants (therein) were entitled to the benefit of Notification
No. I 75/86-C.E. dated lst March, 1986. That Notification also contained an
explanation (being Explanation VIII) which in terms is identical to the D
Explanation under consideration by us. The Appellants therein used the
following words :

"MANUFACTURED IN INDIA BY

NIPA CHEMICALS LTD., In Collaboration with Nihon E
Parkerizing Co. Ltd., Japan. 46, Garuda Buildings, Cathedral
Road, Chennai-600086.

MARKETED IN INDIA BY

Goodlass Nerolac Paints Ltd., GANPATRAO KADAM MARG,
LOWER PAREL, MUMBAI400013." p
The Tribunal held that the use of these words did not preclude the Appellants
(therein) from availing of the benefit of the Notification. To be immediately
noted that in that case it was neither admitted nor proved that the words were
used to indicate a connection between the product and Nihon Parkerizing Co. G
Ltd. The Tribunal so notes. Had the Tribunal based its decision on this aspect
no fault could have been found. However, the Tribunal then goes on to hold
as under :

"9. It is further mentioned in the above said explanation by stating
that the name or a mark means a symbol, monogram, label, signature H
476 SUPREME COURT REPORTS [2005) 3 S.C.R.

A or invented word or writing which is used in relation to such specified
goods for the purpose of indicating the above said connection. The
writings in the above said case, in our opinion cannot come within
the purview of symbol. It cannot also be a monogram. The same
cannot be a label or a signature. It cannot be an invented word in
view of the fact that these are names of the company but are comprised
B of two/three words.

10. The learned JDR stated that this will come within purview of
"name". But in order to come within the purview of 'name', we have
to again look into the definition of "brand name" and the elaboration
c given therein. The elaboration given therein is 'symbol, monogram,
label, signature or invented word or a writing'. We have already
ruled out that it does not come within the purview of a mark or a
symbol or a monogram or label or any invented word in view of the
reasons furnished above.

D l l. The next question is whether it comes within the purview of
a writing which is used in relation to such specified goods for the
purpose of indicating a connection in the course of the trade. In this
connection, we have to look into the definition of "WRITE" and
"WRITING" in the OXFORD DICTIONERY. The same are defined
as follows :-
E
Write (r-) v. (past t. Wrote, past part, Wri'tten). Form symbols
representing letter(s) cir word(s) esp. on paper, parchment, etc.,
with pen, pencil, brush, etc., form (such symbols), set (words
etc.) down in writing, express in writing; chronicle, make record
or account of; convey (message, information, etc.) by letter;
F engage in writing or authorship; produce writing; - down, set
down in writing; write in disparagement or depreciation of; reduce
(total, assets, etc.) to lower. amount; - off, record cancelling of
(bad debt, depreciated stock, etc.); reckon as lost or worthless; -
off (n.) something that must be regarded as total foss or wreck,
G failure; - out, make written copy of; transcribe in full or detail;
.'... up, write full account or record of; give full or elaborate
description of; commend by appreciative writing, praise in writing;
--up (n.) review or report.
Writing (r-) n. (esp.) Written document; (piece of) literary work;
H personal script, handwriting; put in -, write down; the Writings,
C.C.E., TRICHY,.. GRASIM INDUSTRIES LTD. [S.N. VARI AVA, J.] 477
= HAGIOGRAPHA; -- case, case holding writing materials; -- A
desk, desk; --master, instructor in penmanship; the yellow-
hammer (from marks like scribbling on eggs); --paper, paper for
writing on with ink, esp. note-paper; --table, desk.

12. It is therefore seen that these are certain words enumerated to
project the name of the two particular companies and they do not B
come within the purview of "Writing" or "name". These are mere
printed words indicating the names of two companies. Therefore, in
our view, these will never come within the purview of "brand name"
in view of the fact that they do not come within the meaning of
"name" or "mark" which is elaborated in the explanation to "brand C
name" and this being the position, the arguments of the learned DR
cannot be accepted ........... "

In our view, the Tribunal has completely misdirected itself. The term "brand
name or trade name" is qualified by the words "that is to say". Thus, even
though under normal circumstances a brand name or a trade name may have D
the meaning as suggested by the Tribunal, for the purposes of such a
Notification the terms "brand name or trade name" get qualified by the words
which follow. The words which follow are "a name or a mark". Thus even
an ordinary name or an ordinary mark is sufficient. It is then elaborated that
the "name or mark" such as a "symbol" or a "monogram" or a "label" or
even a "signature of invented word" is a brand name or trade name. However, E
the contention is that they must be used in relation to the product and for the
purposes of indicating a connection with the other person. This is further
made clear by the words "any writing". These words are wide enough to
include the name of a company. The reasoning given by the Tribunal based
on a dictionary meaning of the words "write" and "Writing" is clearly
erroneous. Even the name of some other company, if it is used for the purposes
F
of indicating a connection between the product and that company, would be
sufficient. It is not necessary that the name or the writing must always be a
brand name or a trade name in the sense that it is normally understood. The
exemption is only to such parties who do not associate their products with
some other person. Of course this being a Notification under the Excise Act, G
the connection must be of such a nature that it reflects on the aspect of
manufacture and deal with quality of the products. No hard and fast rule can
be laid down however it is possible that words which merely indicate the
party who is marketing the product may not be sufficient. As we are not
dealing with such a case we do not express any opinion on this aspect.
H
478 SUPREME COURT REPORTS [2005) 3 S.C.R.

A This Court has, in the case of Royal Hatcheries Pvt. Ltd. v. State of A.
P., reported in [1994] Supp 1 SCC 429, already held that words to the effect
"that is to say" qualify the words which precede them. In this case also the
words "that is to say" qualify the words "brand name or trade name" by
indicating that these terms must therefore be understood in the context of the
words which follow. The words which follow are of wide amplitude and
B include any word, mark, symbol, ~onogram or label. Even a signature of an
invented word or any writing would be sufficient if it is used in relation to
the product for purpose of indicating a connection between the product and
the other person/company. It is thus clear that the Tribunal's decision in
Nippa Chemicals (Pvt.) Ltd. 's case is clearly erroneous and. will stand
C overruled.

In the case of Collector of Central Excise, Goa v. Christine Hoden (/)
Pvt. Ltd., reported in (1999) 113 EL T 591 the question was whether the use
of the word "comfit" with the name "Christine Hoden London, Rome
Stockholm" would disentitle the Respondents therein from the benefit of the
D Notification. It was however found, as a matter of fact, that the word "comfit"
was owned by the Respondent. It was on that basis held that the Respondents
therein were entitled to the benefit of Notification. To this extent the Tribunal
was right. However, the Tribunal has unnecessarily also gone on to comment
as follows :

E "Mere indication of the foreign company's name does not create any
association in the course of trade between the goods and the foreign
company."

There would be no purpose in indicating the foreign company's name
F in relation to the product except to indicate a connection between the product
and the foreign company. Therefore, to this extent, the Tribunal is not correct.

In the case of Commissioner of Central Excise, Hyderabad v. Sarat
Electronics, reported in (2004) 167 EL T 404 the question was whether the
Respondents (therein) were entitled to benefit of Notification No. 1/93-C.E.,
G which Notification was identical to. the one under consideration by us. The
Respondents therein used the words "SARA T" in bold letters following which
..
"
the words "A quality product from ITL group" and "Technical licencee of
ITL" were also printed. The Tribunal, following its earlier decisions, held as
follows :

H "6. In the facts of the present case, we are. of the view that the
C.C.E., TRICHYv. GRASIM INDUSTRIES LTD. [S.N VARIAVA, J.) 479

expression "ITL" was used to convey the name of the company and A
not as a trade mark. It showed that the technical know-how was
obtained from -rnstrument Techniques Pvt. Ltd. The expression "A
quality product from ITL group" also would not mean that the product
was manufactured by Instrument Techniques Pvt. Ltd. According to
us, the facts of the case are more akin to the facts in Weigand India B
(P) Ltd and Chemguard Coatings Pvt. Ltd. rather than Chopra
Appliances."

In our view, the Tribunal was clearly erroneous. As indicated above, the
Explanation makes it clear that it need not be a trade name or brand name
as commonly understood. Any name or mark or writing, even the name of C
a company is sufficient so long as it is used for the purpose of indicating a
connection between the product and that Company. The use of the words "A
quality product from ITL group" clearly showed an intention to show a
connection between the product and the !TL group. These words indicated
that the quality of the product was the same as that of a product of ITL group.
If use of such words did not disentitle a party from the benefit of the D
Notification, we fail to understand what sort of words would disentitle a
party. The decision of the Tribunal in this case is clearly erroneous and will
stand overruled.

In this view of the matter, we set aside the impugned Judgment and
restore the Order passed by the Commissioner of Central Excise dated 19th E
May, 1999.

However, by this Order, the Commissioner has also imposed penalty in
a sum of Rs. 10,00,000 under Rule l 73Q of the Central Excise Rules. While
the conclusions of the Commissioner that the Respondents were not entitled
to the benefit of the Notification are correct, the fact still remains that the F
Tribunal has in a number of matters given an interpretation as understood by
the Respondent. It therefore cannot be said that the Respondents could not
have taken the view they did. It cannot be said that they could never have
concluded that they were entitled to the benefit of the Notification. We
therefore feel that this is a case where penalty should not be imposed. We G
therefore delete the imposition of penalty on the Respondents.

The Appeals stand disposed of accordingly. There will be no order as
to costs.

S.K.S. Appeal disposed of. H