CASE NO.: Appeal (civil) 4424 of 2004 PETITIONER: Commnr. of <ORG>, Raipur RESPONDENT: M/s. Hira Cement DATE OF JUDGMENT: 02/02/2006 BENCH: <NAME> & <NAME> JUDGMENT:

J U D G M E N T S.B. SINHA, J : .

This appeal under Section 35L(b) of the Central Excise Act, 1944 (for short "the Act") is directed against a final judgment and order dated 22.1.2004 passed by <ORG>, New Delhi in Appeal No. 145/2004-B whereby and whereunder the appeal preferred by the Appellant herein was dismissed.

The basic fact of the matter is not in dispute. The assessee is <ORG>. It carries on business of manufacture of cement in the town of Raipur. It is a small-scale industry (SSI) being a proprietory concern of one <NAME>. Another industry, known as <ORG>, is also a manufacturer of cement having a factory in the town of Jagdalpur which is situated at a distance of about 300 kms. from Raipur. <ORG> was incorporated and registered under the Companies Act on or about 20th October, 1983 whereas the <ORG> herein was set up in the year 1988. <ORG> is not a SSI unit. The unit of the <ORG> was earlier known as <ORG> whereas that of <ORG> was known as <ORG> The capacity of production of the <ORG>'s cement industry is about 60 tonnes per day whereas that of <ORG> is 150 tonnes per day.

As a <ORG> unit, the Respondent herein claimed exemption from payment of excise duty in terms of a notification dated 28.2.1993. The said notification was issued under Section 5A of the Act; paragraph 4 whereof reads as under:

"4. 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:

Provided that nothing contained in this paragraph shall be applicable to the specified goods which are component parts of any machinery or equipment or appliances and cleared from a factory for use as original equipment in the manufacture of the said machinery or equipment or appliances and the procedure set up out in Chapter X of the said Rules is followed:

Provided further that nothing contained in this paragraph shall be applicable to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of <ORG> or of <ORG>."

"Brand name" or "trade name" has been defined in Explanation IX of the said notification in the following terms :

"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 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 indication of the identify of that person."

The Respondent herein states :

"<ORG> is thus a Limited company run by <NAME> and other Directors whereas <ORG> is a proprietorship concern owned by <NAME>. <NAME> is the nephew of <NAME> and that was the main reason for which both the units were held to be related parties. However, there is no other nexus or relation between <ORG> and <ORG>. <NAME> and <NAME> are not even falls within the ambit of definition of Relatives as defined under Section 6 of the companies Act, read with Schedule 1 A of the Act .

<ORG> has hired a portion of premises of <ORG> for maintaining its Registered Office at Raipur and a small godown for keeping its goods. <ORG> used to purchase <ORG> from <ORG> and for catering to the needs of its Raipur customers <ORG> used to keep those goods in the said godown. Accordingly, the Registered Office and Telephone Numbers of <ORG> and Office Address and Telephone Numbers of <ORG> happened to be the same. Both the entities were operating independently."

The Appellant contends that the Respondent, herein was not entitled to claim the benefit of SSI exemption on the ground that the same would not apply to the specified goods bearing a brand name of another person, in view of the fact that the Respondent has been using the brand name of said <ORG>.

Further contention of the Appellant is that the said <ORG> being engaged in the manufacture of cement with the brand name of <ORG> which demonstrates the financial interrelationship of both the concerns as belonging to a group of industries, known as <ORG>.

Indisputably, 10 show-cause notices were issued by the Superintendent/ Assistant Commissioner concerned upon the Respondent calling upon it to show cause as to why the SSI exemption granted to it should not be disallowed and the duty which was not paid for the period December, 1993 and December, 1997 should not be recovered. In the said proceedings, the Respondent was held to be not entitled to such exemption.

However, on an appeal made by the Respondent, by an order dated 28.12.2001, the Commissioner dropped the proceedings inter alia relying on or on the basis of a decision of the <ORG> in <CITATION> [2000 (124) ELT 741 (<ORG>)], holding :

"Thus, I hold that both firms were not using common brand name on the packings of their products which will disentitle the notice from benefit of exemption under Notification 1/93-CE dtd. 28.2.93 as amended, 7/97-CE dtd. 1.3.97 (Superseded by Notification No. 16/97-CE dtd. 1.4.97) and 38/97-CE dtd. 27.6.97 etc. by merely alleging that they have used the brand name of another firm, i.e., M/s. Hira Industries Ltd., Jagdalpur. Hence, I find that there is no justification in demand of duty of Rs. 49,77,206/- from the noticee for the concerned period alleged in the Show Cause Notices listed in para  I of this order by disallowing the benefit of exemption notification No. Notification 1/93-CE dtd. 28.2.93 as amended, 7/97-CE dtd. 1.3.97 (superseded by Notification No. 16/97-CE dtd. 1.4.97) and 37/97-CE dtd. 27.6.97 etc. to the Noticee."

As regard the question that the Respondent and the said <ORG> are related persons to each other, it was held that they are separate juristic persons. An appeal thereagainst was preferred by the Appellant before the <ORG> and by reason of the impugned judgment, the same was dismissed.

The <ORG> upon comparing the logos of both <ORG> and <ORG> observed:

"A perusal of the logo and brand name used by the respondents clearly reveals that their brand name is "<ORG>", whereas the brand name of <ORG> is "<ORG>". Merely, because the logo is similar in both the cases, it cannot be alleged by the <ORG> that the respondents are using the brand name of another person for the purpose of attracting the mischief of para 4 of the Notification. In the present matter, the <ORG> has not established that the brand name used by <ORG> is used by the Respondents. There is a substantial force in the submissions of the learned Advocate for the respondents that the words '<ORG>' written on their bags of cement is the name of their company and not the brand name of <ORG>"

It is not in dispute that the Appellant in its notice dated 20th/22nd May, 1992 mentioned that a proceeding was initiated against the Respondent as also the said <ORG> as regard valuation of the goods wherein ultimately by an order dated 21.9.2001, the Commissioner dropped the proceedings. It is also not in dispute that in the appeal preferred by the Appellant, herein before the <ORG> questioning the order dated 28.12.2001, the assessee objected to the maintainability of the appeal by filing a cross-objection before the <ORG>. The Commissioner in its earlier order dated 21.9.2001 opined:

"d) On comparing the two bags submitted by the two noticees No. 1 and 2 which was submitted by them during the course of personal hearing on 3.9.2001, it is clear that notice No. 1's brand name '<ORG>' was more prominent on their bags whereas in case of bags of noticee No. 2 brand '<ORG>' with a logo of diamond on top is more prominent. This fact may be further corroborated with samples and drawings of HDPE/ Jute bags submitted by noticee No. 1 to the Assistant Collector Central Excise & Customs, <NAME> under their letter No. HC: 91-92 dtd. 4.2.92 enclosing the photocopies of the documents. Hence noticee No. 1 M/s. <ORG> (firms name) have used only brand name '<ORG>' on their products. They have not used <ORG> as their brand name which is being alleged in the show cause notice belongs to noticee No.

2. <ORG> sold their products with brand name '<ORG>' with diamond logo/ mark on the top. Brand name of the both the firms are different. These are not further substantiated during the course of investigation and facts brought on the record.

e) Thus, I hold that both the noticees were not using common brand name on the packings of their product which will disentitle the noticee No. (1) from benefit of exemption under notification No. 175/86 by merely alleging that they have used the brand name of noticee No. 2. Hence, I find that there is no justification in demand of duty of Rs. 326357.75 from noticee No. 1 for the period 21.6.91 to December, 91 by way of disallowing the benefit of exemption notification No. 175/86 CE to noticee No. 1"

However, in the said proceedings, penalties of Rs. 50,000/- and Rs. 25,000/- were imposed against the Respondent and the said <ORG>, respectively.

An appeal thereagainst was preferred by the Respondent to the extent of demand confirmed on the ground of alleged related person under Section 4 of the Act. The said appeal was dismissed. An appeal preferred thereagainst by the Respondent before this Court was also dismissed. The contention of the Respondent in the aforementioned situation is that the said order dated 21.9.2001 attained finality and, thus, having been accepted by the Appellant, the present appeal was not maintainable.

Mr. <NAME>, learned Solicitor General appearing on behalf of the Appellant would, at the outset, draw our attention to the fact that the decision of the Tribunal in Emkay Investment (supra) has expressly been reversed by a 3-Judge Bench of this Court in <CITATION> [] stating:

"15. We have gone through the common order passed by the <ORG>. In our view, the <ORG> has erred in not appreciating that to attract provision of clause 7 of Notification No. 175/86-CE, it is sufficient that the 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 name/trade name/logo of the manufacturer would not and cannot alter such position. Likewise, the interpretation of Explanation VIII as advanced by the <ORG> does not appear to be correct in law and in fact. It was imperative that by using the registered logo "<ORG>" belonging to <ORG> on their own product <ORG> fulfilled the purpose of indicating a relation between the said products and the logo owner so as to influence the trade and therefore, the provisions of Explanation VIII were fully satisfied so far as the case on hand was concerned. The finding of the <ORG> to the contrary, in our opinion, is wrong and liable to be set aside."

It was submitted that in that view of the matter the impugned judgment of the <ORG> and the order of the Commissioner cannot be sustained. As regard the cross-objection filed by the Respondent, it was urged that the order of the Commissioner dated 21.9.2001 having a limited effect, the same will not debar the Appellant from maintaining an appeal. In any event, the law having been declared by this Court, the decision of the Commissioner must give way to the decision of this Court.

Mr. <NAME>, learned counsel appearing on behalf of the Respondent, on the other hand, would submit that once the said order dated 21.9.2001 attained finality, the Appellant did not have any locus standi to maintain an appeal before the <ORG> and consequently this appeal. It was further contended that a finding of fact has been arrived at by the Commissioner as also the <ORG> to the effect that it is not the assessee who had been using the brand name of the said <ORG> and as if <ORG> was using the brand name of <ORG> belonging to the Respondent herein, the assessee cannot be blamed therfor, the impugned judgments should not be interfered with. Drawing our attention to various distinctive features in the respective logos of the Respondent as also the said <ORG>, the learned counsel urged that the question must be adverted to keeping in view of the fact that the dispute does not relate to trade mark and in that view of the matter if the said <ORG> had been using the premises belonging to the Respondent as also the telephones which are installed therein or had been selling cement from it, the same by itself cannot be a ground for holding that the Respondent had been using the brand name of the said <ORG>. It was submitted that in fact the said <ORG> had been purchasing cement from the Respondent.

The purport and object of grant of exemption to a SSI unit is clear and unambiguous. It can be availed of, provided that they satisfy the conditions precedent therefor. The criteria for determining the eligibility of an entrepreneur for becoming entitled to have the benefit of exemption notification, it is well-settled, must be construed strictly. [ <CITATION> ,  and <CITATION> , 2005 (6) SCALE 683].

<CITATION> [2004 (165) ELT 481 : ], the expression "such brand name" was considered holding:

"7. The <ORG> had also held that under the Notification the use must be of "such brand name". The <ORG> has held that the words "such brand name" shows that the very same brand name or trade name must be used. The <ORG> has held that if there are any differences then the exemption would not be lost. We are afraid that in coming to this conclusion the <ORG> 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 number, 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 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."

<CITATION> [2004 (166) ELT 23], the same view was reiterated. The views expressed therein have also been reiterated in <CITATION> (supra).

The ratio of the decisions referred to hereinbefore shortly stated is that if the manufacturer uses some brand of its own, it would be entitled to, but it would not be, for one reason or the other, it had been using the brand of another. The learned Commissioner or the learned <ORG>, as noticed supra, did not have the occasion to consider the question in the light of the aforementioned decisions of this Court.

<ORG> (supra) which was the basis for the decision of the Commissioner has expressly been overruled by this Court. The cross- objections filed by the Respondent, herein before the <ORG> also had not specifically been adverted to as the matter relating to maintainability of the appeal preferred by the Appellant, herein before the <ORG> does not appear to have been discussed nor any reference thereto has been made in the concluding paragraph of the judgment.

Before us, the parties have placed the entire facts. We may also place on record that it has been conceded before us by the learned counsel appearing on behalf of the Respondent that the earlier order dated 26.9.2001 shall not operate as a res-judicata but, as noticed hereinbefore, the only contention raised was that once the <ORG> accepts a judgment, it cannot raise the said question once again.

Although some decisions to this effect have been cited by Mr. <NAME>, we are of the opinion that the matter should be considered afresh by the <ORG> upon considering all aspects of the matter. We refrain ourselves from going into the said question. We may, however, notice that a Bench of this Court in <CITATION> , [] stated:

"Non-filing of an appeal, in any event, would not be a ground for refusing to consider a matter on its own merits. ( <CITATION> .) <CITATION> wherein this Court noticed <NAME> by holding:

"4. <NAME>, the learned counsel for the appellants, contended that though an appeal against the earlier order of <ORG> has not been filed, since larger public interest is involved in the interpretation given by <ORG> following its earlier judgment, the matter requires consideration by this <ORG>. We find force in this contention. In the similar circumstances, this <ORG> in <CITATION> and in <CITATION> had held that though an appeal was not filed against an earlier order, when public interest is involved in interpretation of law, the <ORG> is entitled to go into the question.""

As we intend to remit the matter back to the <ORG>, we should not make any observation at this juncture which would affect the merit of the matter one way or the other. We may also be misunderstood. Suffice it to say that having regard to the definition of the brand name as contained in Explanation IX to the notification dated 28.2.1993, the matter requires fresh consideration by the <ORG> upon taking into consideration the fact of the matter. If, however, the <ORG> comes to the conclusion or is of the opinion that further investigation in facts may be necessary, it may pass such order or orders as it may think fit and proper.

This appeal is allowed and the impugned judgment is set aside and the matter is remitted to the <ORG> for consideration of the matter afresh in the light of the observations made hereinbefore. No costs.