COMMISSIONER CENTRAL EXCISE, DELHI versus M/S. ACE AUTO COMP. LTD.

5. Being aggrieved, the assessee preferred an appeal before the Commissioner of Central Excise (Appeals). The Commissioner (Appeals), vide order dated 10th February, 2002, allowed the appeal, observing thus: "5.4 Thus, we find that the appellate bodies are treating any slight variation in the brand names as different entities as in "Mahaan" and "Mahaan Tastemaker" or "AGI" and "AGI Switches". Here, the two conflicting brand names are "TATA" and "TATA ACE" and the sole reason for this usage of the name "TAT A" is that it stands earmarked for a particular vehicle. They are also manufacturing auto parts for use in the other vehicles of different manufacti.:rers for which they do not use this logo. 5.5. In the light of the above decisions of the Hon'ble CEGAT, I have no alternative but to follow the judicial COMMISSIONER CENTRAL EXCISE, DELHI v. ACE 1107 AUTO COMP. LTD. [D.K. JAIN, J.] precedent. I thus hold that 'TAT A ACE' brand name is different from the popular brand name "TATA"."

6. Aggrieved, the revenue took the matter further in appeal to the Tribunal. As stated above, vide the impugned order, the Tribunal has dismissed the appeal. The Tribunal has come to the conclusion that: "According to the Notification, exemption shall not apply if the specified goods are bearing the brand name of another person. It is not the case of the Revenue that 'Tata Ace' is the brand name of another person. The very fact that there is no material to prove that the brand name, which the excisable goods manufactured by the respondents bear, belongs to another person, the mischief of Para 4 of the Notification No. 1/93 will not be attracted. We also find substance in the finding of the Commissioner (Appeals) that the usage of the name 'Tata' in the brand name is with a view to indicate that the part is for a particular vehicle manufactured by Tata."

7. Hence, the present civil appeal.

8. Mr. B. Bhattacharya, learned Additional Solicitor General appearing on behalf of the Revenue, while assailing the impugned order, urged that in light of the decisions of this Court in Commissioner of Central Excise, Calcutta Vs. Emkay Investments (P) Ltd. & Anr1• and Commissioner of Central Excise, Chandigarh-I Vs. Mahaan Dairies2 , it is settled that whenever the assessee affixes the brand name of another person on its goods with the intention to indicate some connection between the goods and the said brand name, the assessee is barred from availing the benefit of the Notifications. It was asserted that in view of the fact that indubitably the brand 1. (2005) 1 sec 526. 2. (2004) 11 sec 798. A name "TAT A", which did not belong to the assessee but to another identified company, had been affixed by the assessee on their product, although in conjunction with the word "ACE" the Tribunal's conclusion that there was no material to prove that the brand name "TATA ACE" belonged to another person, B is clearly a misconstruction of para 4 of the notifications in question and therefore, its decision deserves to be set aside.

9. Mr. S.K. Bagaria, learned senior counsel, appearing as Amicus Curiae, submitted that the Tribunal has rightly concluded that there was no evidence to prove that the brand C name 'TATA ACE" belonged to another person, and the said finding of fact deserves to be affirmed as it has not been specifically challenged by the Revenue. Learned counsel argued that in the present case the pre-requisite for invoking paragraph 4 of Notification No. 1/93 is not satisfied in as much D as the Revenue has not been able to establish that the brand name 'TATA ACE" belongs to another person. In support of the submission that the burden to prove that the brand name belongs to another person is on the Revenue, learned counsel placed reliance upon the decision of this Court in E Commissioner of Trade Tax, U.P. & Anr. Vs. Kajaria Ceramics Ltd. 3. Commending us to the decision of this Court in Pappu Sweets and Biscuits & Anr. Vs. Commissioner of Trade Tax, UP., Lucknow\ learned counsel argued that paragraph 4 of Notification No.1/93 being an extlusionary F clause, the same has to be strictly construed. Learned counsel contended that since both the Tribunal as also the Commissioner (Appeals) have concluded that the use of the word "TATA" was merely to denote that the product was meant for use in a particular vehicle, the affixation of 'TATA" was G merely descriptive of the assessee's product and not as if the goods had been marketed with another brand name. Relying on the decisions of this Court in Nirlex Spares (P) Ltd. Vs. 3. (2oos) 11 sec 149. 4. (1998) 1 sec 228. COMMISSIONER CENTRAL EXCISE, DELHI v. ACE 1109 AUTO COMP. LTD. [D.K. JAIN, J.] Commissioner of Central Excise5; Commissioner of Central Excise, Jamshedpur Vs. Superex Industries, Bihar6 and Emkay Investments (P) Ltd. (supra), learned counsel submitted that mere use of the word "TAT A" should not disentitle the assessee from the benefit of the two Notifications. Learned counsel further urged that the Revenue's argument that the use of the word "TATA" would create an impression in the minds of the consumer that the said product was manufactured by one of the Tata companies was misplaced in as much as no such test was envisaged under the Notifications. Moreover, the Revenue had not made any such allegation in the show cause c notice, and in light of the decisions of this Court in Commissioner of Customs, Mumbai Vs. Toyo Engineering India Ltd. 7 and Commissioner of Central Excise, Nagpur Vs. Ballarpur Industries Ltd. 8, it is trite that the foundation of the Revenue's case is laid in the show cause notice, and the same must be confined to the allegations contained therein.

10. Before adverting to the rival submissions, it would be useful to extract relevant portions of Notification No. 1/93-CE dated 28th February, 1993 as amended, which grants exemption from payment of Central Excise duty to small scale industrial units. It read as: "4. The exemption contained in this notification shall not apply to the specified goods, bearing brand name or trade name (registered or not) of aRother person: Explanation IX.- "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, 5. (2008) 2 sec 628. 6. (2005) 4 sec 207. 7. (2006) 7 sec 592. 8. (2007) a sec 89. 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 identity of that person." Notification No. 16/97- CE dated 1st April, 1997 contains the same definition of "brand name" as Notification No. 1/93-CE, and also provides that the exemption contained therein shall C not be available to goods bearing the brand name of another person.

11. It is manifest from a bare reading of Clause 4 of the Notification, read with Explanation IX that it clearly debars an assessee from the benefit of exemption under the notification, D if he uses another person's brand or trade name with the intention of indicating a connection between the assessee's goods and such other person. It is evident that the object of the exemption notification is to grant benefits only to those industries which otherwise do not have the advantage of brand E or trade name. (See: Commissioner of Central Excise, Chandigarh-I/ Vs. Bhalla Enterprises; 9 Nirlex Spares (P) Ltd. (supra); Commissioner of Central Excise, Raipur Vs. Hira Cement. 10)

12. In Kohinoor Elastics (P) Ltd. Vs. Commissioner of F Central Excise, Indore, 11 while construing an identical notification (No.1of1993-CE), dated 28th February 1993, this Court had observed that: "Clause 4 of the notification is unambiguous and clear. It specifically states that the exemption contained in the notification shall not apply to specific goods which bear a 9. (2005) 8 sec 308. 10. (2006) 2 sec 439. H 11. (2005) 7 sec 528. COMMISSIONER CENTRAL EXCISE, DELHI v. ACE 1111 AUTO COMP. LTD. [D.K. JAIN, J.l brand name or trade name (registered. or not) of another person. It is settled law that to claim exemption under a . notification one must strictly comply with the terms of the notification. It is not permissible to imply words into the · notification which the legislature has purposely not used. The framers were aware that use of a brand/trade name is generally to show to a consumer a connection between the goods and a person. The framers were aware that goods may be manufactured on order for captive consumption by that customer and bear the brand/trade name of that customer. The framers were aware that such c goods may not reach the market in the form in which they were supplied to the customer. The framers were aware that the customer may merely use such goods as an input for the goods manufactured by him. Yet clause 4 provides in categoric terms that the exemption is lost if the goods . D bear the brand/trade name of another. Clause 4 does not state that the exemption is lost only in respect of such goods as reach the market. It does not· carve out an exception for goods manufactured for captive consumption. The framers meant what they provided. The exemption was to be available only to goods which did not bear a brand/trade name of another. The reason for this is obvious. If use of brand/trade names were to be permitted on goods manufactured as per the orders of customers or which are to be captively consumed then manufacturers, who are otherwise not entitled to exemption, would get their goods or some inputs manufactured on job-work basis or through some small party, freely use their brand/trade name on the goods and avail of the exemption. It is to foreclose such a thing that clause 4 provides, in unambiguous terms, that the exemption is lost if the "goods" bear a brand/trade name of another." We are in respectful agreement with the reasoning in the afore-extracted paragraph. c 13. In Commissioner of Central Excise, Trichy Vs. Grasim Industries Ltd. 12 , a Bench of three judges of this Court, while construing Notification No. 5/98-CE, dated 2nd June 1998, which was similar to the one under consideration by us, had observed that: " …. Even the name of some other company, if it is used for the purposes 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, 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." (Emphasis supplied by us) 14. Therefore, in order to avail of the benefit of the exemption notification, the assessee must establish that his product is not associated with some other person. To put it differently, if it is shown that the assessee has affixed the brand name of another person on his goods with the intention of indicating a connection between the assessee's goods and the goods of another person, using such name or mark, then the assessee would not be entitled to the benefit of exemption G notification. We may hasten to clarify that if the assessee is able to satisfy the Adjudicating Authority that there was no such intention, or that the user of the brand name was entirely fortuitous, it would be entitled to the benefit of the exemption. H 12. c2oos) 4 sec 194. COMMISSIONER CENTRAL EXCISE, DELHI v. ACE 1113 AUTO COMP. LTD. [D.K. JAIN, J.] 15. In the instant case, admittedly, the brand name "TATA" did not belong to the assessee. It is also evident that by using the said brand name, the assessee had not only intended to indicate a connection between the goods manufactured by them and a Tata Company; but also the quality of their product as that of a product of Tata Company, as they were supplying their goods to the said company. Thus, the bar created in Clause 4 · read with Explanation IX of the Notification is clearly attracted in the present·case, disentitling the assessee from the benefit of the exemption notifications under consideration. We are of the opinion that the decision of the Tribunal is clearly erroneous c and deserves to be set aside. 16. Consequently, for the foregoing reasons, the appeal is allowed; the impugned order is set aside and the order passed by the Adjudicating Authority is restored. 17. Before parting with the case, we place on. record our deep appreciation for the valuable assistance rendered by Shri S.K. Bagaria, the learned Amicus Curiae. 18. There will be no ord.er as to costs. N.J. Appeal allowed.