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Collector Of Customs, Bombay vs K. Mohan & Co. Exports on 25 September, 1989
Malabar Fisheries Co, Calcutta vs Commissioner Of Income Tax, ... on 19 September, 1979
Commissioner Of Income Tax, ... vs Cellulose Products Of India Ltd on 4 September, 1991
Commissioner Of Central Excise, ... vs Mahaan Dairies on 17 February, 2004
M/S. Kores India Ltd., Chennai vs Commissioner Of Central Excise, ... on 23 November, 2004

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Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Kali Aerated Water Works on 26 April, 2005
Equivalent citations: 2005 (190) ELT 475 Tri Chennai
Bench: A T V.K., P Chacko

ORDER

P.G. Chacko, Member (J)

1. Among these appeals of the Revenue, six are against orders passed by the Commissioner of Central Excise (Appeals), Tiruchirapalli and the remaining two are against an order passed by his counterpart at Salem. The lower appellate authorities allowed the benefit of SSI exemption under Notification No. 1/93-C.E., dated 28-2-93 (as amended) in respect of the clearances of aerated waters and other nonalcoholic drinks and beverages effected by the respondents during various periods after 1-4-1994. This is being challenged by the Revenue contending that the above clearances of goods having been made under brand names belonging to "another person" viz. Shri K.P.R. Sakthivel, Kali Aerated Water Works, Chennai attracted the bar created in para 4 of the above Notification as amended by Notification No. 59/94-C.E. The amounts of duty mentioned in the 3rd column of the table given below are sought to be recovered for the periods mentioned in the 4th column thereof from the assessees named in the 5th column. The persons named in the last column of the table who are the respondents herein had obtained the respective manufacturing units mentioned in the 5th column, in terms of a DEED OF MUTUAL AGREEMENT dated 12-3-1993 entered into between 10 coparceners (including the respondents) of an erstwhile Hindu Undivided Family (HUF) and were independently running the business of manufacture and sale of aerated waters, etc. in their respective territories during the respective periods :

1. 2. 3. 4. 5. 6.

Appeal No. O-I-A Amount Period Unit's Name Proprietor

(S/Shri)

E/454/2002 130/2002 Rs. 6,92,485/- 12-5-94 to Kali Aerated Water K.P.R.

dt. 8-7-2002 19-12-94 Works, Madurai-I Dhanush-

Division kodi

E/455/2002 131/2002 Rs. 61,81,832/-11-96 to Kali Aerated Water -do-

dt. 8-7-2002 5-2001 Works, Madurai-I

Division

E/456/2002 132/2002 Rs. 47,62,971/-17-4-95 to Kali Aerated Water K.P.R.

dt. 8-7-2002 March, 2000 Works, Karaikudi Nageswaran

E/459/2002 133/2002 Rs. 66,76,177/-1994-2000 Kali Aerated Water K.P.D.

dt. 8-7-2002 Works, Virudhunagar Prem Kumar

E/566/2002 134/2002 Rs. 36,23,902/-15-3-95 to Kali Aerated Water K.P.D.

dt. 8-7-2002 28-2-2001 Works, Tirunelveli Rajendran

E/580/2002 134/2002 Rs. 54,63,067/-22-4-94 to Kali Aerated Water K.P.D.

dt. 8-7-2002 28-2-2000 Works, Salem Suresh

Kumar

E/882/2004 152 & 153/2004 Rs. 10,91,377/-12-5-94 to Kali Aerated Water K.P.R.

dt. 11-3-2004 31-3-2002 Works, Erode Singaravel

E/883/2004 -do- Rs. 83,898/- 1-4-2002 to Kali Aerated Water -do-

31-10-2002 Works, Erode

2. For a better understanding of the dispute in this case, we think it is necessary to have a look at the HUF's business history. The business of manufacture and sale of aerated waters was started in the name and style of "Kali Aerated Water Works" by the HUF's Karta Shri P.V.S.K. Palaniappa Nadar in 1916 AD. Later on, it was converted into a joint family business of Shri P.V.S.K. Palaniappa Nadar and his three sons S/Shri K.P. Rajendran, K.P. Dharmarajan, K.P. Ganesan and daughter Smt. G. Dhamayanthi Ammal. The business which continued to be known as 'Kali Aerated Water Works' was at Virudhu Nagar and the products were marketed under the brand names, "KALI", "KALI MARK", "BOVONTO", "TRIO", "SOLO", "KALI COLA", "FRUTANG" and "CAPTAIN". After the death (on 22-2-1964) of Shri P.V.S.K. Palaniappa Nadar, his eldest son Shri K.P. Rajendran became the 'karta' of the family and the above brand names/trade marks were got registered in the name of Shri Rajendran qua 'karta' of the family. The joint family business continued till 31-3-1977. From 1-4-1977, upon dissolution of the partnership, the manufacturing units at various places (Virudhunagar, Madras, Madurai, Karaikudi, Tirunelveli, etc.) each of which was known by the name 'Kali Aerated Water Works', were taken over and independently run by individual members of the joint family, with separate financial investments, machineries and other infrastructural facilities. However, all the units continued to use the above brand names/trade marks on their products. Shri K.P.R. Sakthivel, S/o Shri K.P. Rajendran was running the business at Madras. On 31-3-77, he was authorised to submit an application before the Registrar of Trade Marks to get the above brand names/trade marks registered afresh. Accordingly, Shri K.P.R. Sakthivel obtained a Registration Certificate from the Trade Mark Registry. In April, 1992, there was a partition of immovable properties among members of the family. This was followed, in 1993, by execution of a "Deed of Mutual Agreement" relating to use of trade marks. In terms of the DEED OF MUTUAL AGREEMENT dated 12-3-93, Shri K.P.R. Sakthivel permitted other members of the family to use the brand names/trade marks in their respective areas. Thus Shri K.P.R. Dhanushkodi, who was running the business at Madurai, could use the brand names/trade marks in the marketing area allotted to him under the above agreement dated 12-3-93. The other respondents also could use the brand names/trade marks in their respective territories. All the respondents were individually availing exemption under Notification No. 1/93-C.E., dated 28-2-93 also. A dispute arose between the respondents and the department with the amendment of Notification No. 1/93-C.E. by Notification No. 59/94-C.E., dated 1-3-94. This amending Notification inserted a new paragraph w.e.f. 1-4-94 in Notification No. 1/93-C.E. This new para (No. 4) reads thus : "The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name (registered or not) of another person".

The respondents and certain other parties challenged the above amendment before the High Court of Madras in Writ Petitions. The writ petitions were dismissed by a learned Single Judge of the High Court on 16-12-94 as per judgment, later . Aggrieved by this judgment, the writ petitioners preferred appeals to Division Bench of the Court and obtained an order dated 23-12-94 staying the operation of the judgment of the learned Single Judge. The stay order, however, was subject to the following conditions :

"(1) The appellant shall furnish security either in the form of immovable property a bank guarantee in respect of the excise duty arrears for the period from 1-4-1994 till to-day as may be determined by the competent authority. Security to be furnished within two weeks from the date of determination of the duty payable by the appellants.

(2) As far as the duty payable from tomorrow is concerned, the appellants shall pay 50% of the current excise duty as determined by the competent authority."

In terms of the above order of the Division Bench of the High Court, the respondents furnished security for the Excise Duty arrears in respect of their clearances of goods up to 23-12-94 and started paying 50% of the Excise Duty payable thereafter. On their part, the department issued show cause notices to the respondents from time to time.

3. A Division Bench of the High Court disposed of the Writ Appeals on 27-6-2001 by a judgment, later . The relevant part of this judgment is reproduced below :

"5. It is the contention of the learned Counsel for the appellants that the Clause (4) of the said Notification can be made applicable only if the users of the same brand name manufacture the identical goods and not otherwise. We are of the opinion that this is a matter to be decided only by the adjudicating authority. As stated already, since the adjudicating authority had not decided this issue, it is for him to take up the issue after giving an opportunity to the appellants herein. On this short ground, we are of the opinion that the matter has to go back to the adjudicating authority the Assistant Collector of Customs to determine the classification of the goods manufactured by the appellants as well as their claim regarding the exemption of excise duty.

6. Though the learned Single Judge had decided the issue on merits, and had given a finding, since the adjudicating authority had not applied his mind, and decided the question, and also we having found the matter has to go back to the adjudicating authority for proper consideration as to the disputed question of facts, it is necessary that the findings of the learned Single Judge on this aspect alone have to be set aside.

7. Accordingly, the findings of the learned Single Judge in this regard on merits of the claim of the appellants are vacated. The appeals are ordered accordingly and the matter is remitted back to the Assistant Collector of Customs for the purpose of proceeding with the adjudication process afresh."

4. Pursuant to the above judgment, the original authorities having jurisdiction over the assessees took up the respective SCNs for adjudication. After due process of law, the adjudicating authorities held that the clearances of branded goods in question were covered by para 4 of Notification No. 1/93-C.E. (as amended) and accordingly confirmed the demands of duty against the respective assessees for the respective periods vide 3rd column of the table given in para (1) of this order. The assessees preferred appeals against the orders of the original authorities. The appellate authorities vide Orders-in-Appeal mentioned in the 2nd column of the above table set aside the orders of the adjudicating authorities and allowed the assessees' appeals, holding that the benefit of Notification No. 1/93-C.E. (as amended) was available to the subject clearances of branded goods. The appellate Commissioners, relied, inter alia, on a Civil Court's decree which was obtained by Shri K.P.R. Dhanushkodi, proprietor of Kali Aerated Water Works, Madurai, from the court of the Additional District Munsiff, Madurai in OS No. 578/1994, wherein it was declared that the plaintiff (Shri K.P.R. Dhanuskodi) was entitled to use the brand names/trade marks "KALI", "KALI MARK", "BOVONTO", "KALI COLA", "TRIO", "SOLA", "FRUTANG" and "CAPTAIN" within the area allotted to him under the agreement dated 12-3-93 and the defendants (including S/Shri K.P.R. Nageswaran, K.P.D. Prem-kumar, K.P.D. Rajendran, K.P.D. Sureshkumar and K.P.R. Singaravel) and their men, agents, and legal heirs were restrained, by permanent injunction, from interfering with the plaintiff's exclusive legal right to use the said brand names/trade marks within the said area. The department is aggrieved by the orders passed by the appellate Commissioners.

5. Heard both sides. ld. SDR submitted that, in order to claim the benefit of Notification No. 1/93-C.E. (as amended), the assessees should have rebutted the Revenue's allegation that the goods cleared by them after affixing thereon the brand names which stood registered in the name of, and owned by, Shri K.P.R. Sakthivel (proprietor of the manufacturing unit at Madras) were not eligible for the benefit of SSI exemption under the Notification from 1-4-94 on account of the bar contained in para 4 thereof. They should have done this by showing that the brand names belonged to them. It was not in dispute that, during the relevant periods, the brand names/trade marks stood registered in the name of Shri K.P.R. Sakthivel and that other members of the family (respondents) were only permitted to affix them on their goods sold within their respective territories. This position was clear from the terms of the DEED OF MUTUAL AGREEMENT dated 12-3-93. There was nothing in that agreement to indicate that the respondents shared with Shri Sakthivel the ownership of the brand names/trade marks. Thus, according to ld. SDR the brand names/trade marks indisputably belonged to Shri K.P.R. Sakthivel who was covered by the expression "another person" used in para 4 of the Notification (as amended). It was argued that on the wordings of para 4 of the Notification (as amended), the benefit of exemption under the Notification was not available to the branded goods cleared by any of the respondents. Para 4 ibid was in the nature of an exception which required to be strictly construed. To buttress the point, the ld. SDR referred to the Supreme Court's judgments in Rukmani Pakkwell Traders - and Commissioner v. Mahana Dairies - . She also relied on the Tribunal's decision in Kores India Ltd. v. Commissioner - , wherein, after finding that there was no proof of the brand name "ECONOPRINT" of M/s. Kores India Ltd. having been assigned to the assessee viz. M/s. Econoprints Stencils Pvt. Ltd. (ESPL, for short), the Tribunal held that the goods supplied by the assessee to their selling agent (M/s. Kores India Ltd.) after affixing the above brand name were not eligible for the benefit of Notification No. 1/93-C.E. on account of the bar contained in para-4 thereof. Reliance was also placed on the Tribunal's decision in Chhaganlal Sharma v. Commissioner - 2003 (160) E.L.T. 489 (Tri. - Del.), wherein the excisable goods manufactured by M/s. C.H. Herbs (Shri Chhaganlal Sharma was the proprietor of this unit) and cleared under the brand name "An-herb", which belonged to another company, namely, M/s. ANZALP Pharmaceuticals Pvt. Ltd., were held not eligible for SSI exemption inasmuch as there was no proof of the brand name having been assigned by its owner to the assessee during the material period.

6. Further, it was argued that the Civil Court's decree did not, in any way, work against the applicability of the provision contained in para 4 of Notification No. 1/93-C.E. (as amended) to the branded goods in question. That decree, obtained by Shri K.P.R. Dhanushkodi (proprietor of M/s. Kali Aerated Water Works, Madurai) only restrained Shri K.P.R. Sakthivel and other members of the family, who were independently running similar manufacturing units in other areas, from using the brand names/trade marks in the marketing area of the decree-holder. It did not confer ownership of the brand names/trade marks on the decree-holder.

7. Referring to the judgment of the High Court of Madras (Single Bench), dated 16-12-94 and the judgment of the Court (Division Bench), dated 27-6-2001, ld. SDR submitted that the judgment of the ld. Single Judge was set aside only for the purpose of remand of the case to the original authority for de novo decision on an issue which had not been addressed by the said authority. On the substantive issues including the question whether the goods cleared after 1-4-94 by the present respondents (Writ Petitioners) under the brand names/trade marks owned by Shri K.P.R. Sakthivel were hit by the exception in para 4 of Notification No. 1/93-C.E. (as amended), ld. Single Judge had recorded his own findings and these findings were not faulted by the Division Bench. In the circumstances, the reliance placed by the original authorities on the judgment passed by the ld. Single Judge was not inappropriate.

8. Referring to the affidavits filed by the respondents in the High Court, ld. SDR pointed out that the respondents themselves were of the view that, if para 4 of the Notification was given effect to, they would be liable to pay Duty of Excise on the branded goods cleared by them after 1-4-94.

9. On behalf of the respondents, Shri C. Natarajan, Senior Advocate referred extensively to the provisions of the DEED OF MUTUAL AGREEMENT and submitted that, by virtue of the said agreement, all the respondents were co-owners of the brand names and each of them was entitled to use the brand names in his own territory to the exclusion of all others. Shri K.P.R. Sakthivel, in whose name the brand names stood registered, was not entitled to exclusive use thereof for all the areas covered by the agreement. He could use the brand names only within the territory allotted to him under the DEED OF MUTUAL AGREEMENT. He could not be held to be the sole owner of the brand names. Therefore, according to ld. counsel, the respondents doing business in other areas could not be denied the benefit of SSI exemption in respect of their goods cleared under the said brand names, on the ground that the brand names belonged to Shri Sakthivel. In the context of discussing inter se rights and obligations of the respondents and other members of the erstwhile HUF in relation to the brand names, ld. Counsel referred to the Supreme Court's judgments in Malabar Fisheries Co. v. CIT, Kerala - and Sohanlal and Ors. v. Amin Chand & Sons and Ors. - and argued that respondents and other erstwhile partners of the HUF were equally entitled to use all the brand names in their respective territories. Each of the respondents could claim ownership over the brand names within the territory allotted to him under the DEED OF MUTUAL AGREEMENT and others had no right to interfere with such right. Therefore, Counsel argued, the clearances made by any of the respondents within his territory were not hit by the mischief of para 4 of the Notification because the goods so cleared were affixed with his own brand names and not with the brand names of another person.

10. In support of his plea of joint ownership of brand names, ld. Counsel relied on the Tribunal's decision in Commissioner v. Mamma Products - , wherein it was held that the brand name "summer treat" was jointly owned by M/s. Mamma Products and M/s. Manna Products and these parties were entitled to use the brand name within their respective territories and therefore the clearances of branded goods by Mamma Products were not affected by the exclusionary clause under the SSI Notification (8/99-C.E.). Reliance was also placed on the Supreme Court's judgment in Commissioner v. Bhalla Enterprises -2004 (173) E.L.T. 225 (S.C.), wherein it was held that an assessee would also be entitled to the benefit of exemption under Notification No. 1 /93-C.E. if the brand name belonged to the assessee himself although someone else might be equally entitled to that brand name. Ld. Counsel also endeavoured to distinguish the cases of Rukmani Pakkwell Traders (supra) and Mahaan Dairies (supra) cited by ld. SDR. Referring, again, to the subject Notification, ld. Counsel submitted that para 4 thereof contained an exception to exemption from payment of duty. Such an exception had to be strictly construed, ld. Counsel submitted, drawing support from "The Construction of Statutes" by Earl T. Crawford. Further, it was argued that the burden was on the Revenue to show that the goods in question were covered by the exception engrafted in para 4 ibid. In this connection, reference was made to the Supreme Court's judgment in Collector v. K Mohan & Co. Exports - . Ld. Counsel claimed that, in the instant case, the Revenue had not succeeded in establishing that the goods cleared by the respondents during the relevant periods attracted para 4 of the Notification.

11. Referring to the judgment passed by the ld. Single Judge of the High Court in the Writ Petitions of the respondents and others, ld. Counsel expressed the view that nothing contained in the said judgment could be relied on in the instant case as the judgment was set aside by a Division Bench of the Court.

12. We have carefully considered the submissions. There is no dispute of any of the facts constituting the family business history of the respondents. With the death of Shri P.V.S.K. Palaniappa Nadar, the surviving male members of the family constituted a new partnership in 1964 in the name and style of Kali Aerated Water Works with its Head office at Virudhunagar and branches at Madurai, Tirunelveli, Karaikudu, Madras, Kumbakonam and Trichy. The manufacturing units at all these places used the subject brand names/trade marks on their goods. The partnership was dissolved on 31-3-1977, whereupon the male lineal descendants of late Shri Palaniappa Nadar took over the branches and started running the same separately and independently and continued to use the brand names/trade marks. Under the DEED OF MUTUAL AGREEMENT dated 12-3-93, Shri K.P.R. Sakthivel obtained the authority to apply for and obtain fresh registration of the subject brand names/trade marks in his name. Accordingly, Shri Sakthivel obtained registration of all the brand names/trade marks in his own name. It is not in dispute that all the brand names/trade marks, which were previously registered in the names of more than one member of the family including Shri K.P.R. Sakthivel, have stood registered in the sole name of Shri K.P.R. Sakthivel in terms of the DEED OF MUTUAL AGREEMENT. Indisputably, this position has continued throughout the periods of dispute in this case. In terms of the DEED OF MUTUAL AGREEMENT, S/Shri K.P.R. Dhanushkodi, K.P.R. Nageswaran, K.P.D. Prem Kumar, K.P.D. Rajendran, K.P.D. Sureshkumar and K.P.R. Singaravel obtained ownership of the manufacturing units (Kali Aerated Water Works) in Madurai, Karaikudi, Virudhunagar, Tirunelveli, Salem and Erode respectively and also obtained permission of Shri Sakthivel to use the brand names within their respective territories. Accordingly, the respondents could use the brand names within their areas. A perusal of the DEED OF MUTUAL AGREEMENT shows that what was obtained by the respondents from Shri Sakthivel was only a permission to use the brand names within their respective territories. There is nothing in this agreement to indicate that the permission so given is irrevocable. One of the clauses of the agreement needs special mention and the same reads as under : "(xvi) If any party herein or their respective male lineal descendant acts in contravention to these agreed terms, then any party herein or in the absence of any party herein their male lineal descendants can initiate legal proceedings before the Courts of Law for declaration to declare that such party shall have no right to use the trade name/marks in future because of such contravention".

Apparently, it was in terms of the above clause of the DEED OF MUTUAL AGREEMENT that Shri K.P.R. Dhanushkodi, proprietor of M/s. Kali Aerated Water Works, Madurai filed a suit in the Court of Additional District Munsif, Madurai against S/Shri K.P.R. Sakthivel (Chennai) (1st defendant), K.P.R. Singaravel (Erode) (3rd defendant), K.P.R. Nageswaran (Karaikudi) (4th defendant), K.P.D. Rajendran (Tirunelveli) (5th defendant), K.P.D. Sureshkumar (Salem) (7th defendant) and K.P.D. Prem Kumar (Virudhunagar) (8th defendant) and others for a decree of declaration and injunction. The reliefs prayed for in the said suit (OS No. 578 of 1994) were in respect of the right to use the brand names within the places allotted to the plaintiff in the DEED OF MUTUAL AGREEMENT dt. 12-3-93. The Civil Court, on 26-3-96, granted decree to the plaintiff, Shri K.P.R. Dhanushkodi declaring his exclusive right to use the brand names within the allotted territory and restraining the defendants (the present respondents, Shri K.P.R. Sakthivel and others), by permanent injunction, from interfering with the said right of the plaintiff. This was a compromise decree. Accordingly, Shri K.P.R. Dhanushkodi could exclusively use the brand names within his territory without being interfered with by Shri K.P.R. Sakthivel and others. As the decree-holder, he is entitled to the benefit of the decree. No benefit can flow from the above decree to any of the defendants in the suit within the territory allotted to him under the DEED OF MUTUAL AGREEMENT. For instance, Shri K.P.R. Nageswaran, proprietor of Kali Aerated Water Works, Karaikudi cannot claim any benefit under the above decree in respect of the right to use the brand names within the territory allotted to him under the above Deed. The above decree also does not confer ownership of the brand names on Shri K.P.R. Dhanushkodi. It is not a declaration of ownership or title. It only declared his right to use the brand names within his area. Therefore, no reliance can be placed on the Civil Court's decree by K.P.R. Dhanushkodi or other respondents to claim ownership of the brand names.

13. As already noted, the brand names stand registered in the name of Shri K.P.R. Sakthivel. The respondents have not shown that the DEED OF MUTUAL AGREEMENT was taken note of and acted upon by the Registrar of Trade Marks, Chennai. What the respondents obtained under the said agreement was only a permission to use the brand names within their respective territories. It has not been shown to us that this permission was given irrevocably. In the circumstances, we have to hold that the respondents cannot claim to have acquired "ownership" of the brand names/trade marks, nor can any of the respondents claim that the right to use the brand names/trade marks in his allotted area was "assigned" to him. The plea of co-ownership is no longer tenable inasmuch as, with the DEED OF MUTUAL AGREEMENT which authorised Shri K.P.R. Sakthivel to get the brand names registered in his own name and permit others (including the respondents) to use the brand names in their respective areas, the respondents relinquished their ownership, if any, in respect of the brand names. Had they wanted to be co-owners, they would have duly brought their names on the Registration Certificate issued by the Registrar of Trade Marks, for the material period. It is pertinent to note in this context that in the Registration Certificates covering the earlier part of the period 4-1997 to 3-1994, Shri K.P.R. Singaravel (one of the respondents) had held the brand names/trade marks jointly with Shri K.P.R. Sakthivel and some others. The cases of Malabar Fisheries (supra) and Sohanlal & Others (supra) wherein, unlike the present respondents, erstwhile co-parceners of Hindu joint families claimed co-ownership of properties - capital assets in the former case and trade marks in the latter - and resorted to legal remedies to attain the benefit of such right upon dissolution of the joint family partnerships and never did anything in the nature of relinquishment of the right, are of no support to the respondents in the present appeals. In the circumstances, for the periods of dispute, the brand names can only be considered as belonging to Shri K.P.R. Sakthivel in whose name they stand registered for the purpose of use on aerated waters and other non-alcoholic beverages and drinks covering entire Tamil Nadu. In this view of the matter, each of the respondents was clearing his goods under brand names belonging to 'another person' (Shri K.P.R. Sakthivel) and such clearances attracted the exception under para 4 of Notification No. 1/93-C.E. (as amended).

14. Both sides have stated that an 'exception' has to be strictly construed. Notification No. 1/93-C.E. exempted specified goods manufactured by a small-scale industrial unit from payment of duty, but para 4 thereof inserted with effect from 1-4-1994, laid down that the benefit of the Notification would not be applicable to such specified goods when cleared under a brand name, whether registered or not, of another person. What was so engrafted in the Notification was an exception, which should be construed strictly, about which there is no quarrel. Ld. Counsel has relied on an extract from "The Construction of Statutes" by Earl T. Crawford, which reads as under :

"But the exception is also subject to the rule of strict construction; that is, any doubt will be resolved in favour of the general provision and against the exception, and anyone claiming to be relieved from the statute's operation must establish that he comes within the exception. Indeed, the liberal construction of a statute would, in many instances, seem to require that the exception, by which the operation of the statute is limited or abridged, should receive a restricted construction. "

(Emphasis added)

Incidentally, the underlined portion of the above extract touches the burden of proof in relation to exception from statute's operation. The converse of the underlined expression could read thus: anyone claiming to be benefited by the statute's operation must establish that his case is covered by the general provision. Once he so establishes, it is open to his contestant to show that the said case is covered by the exception to the general provision in the statute. In the instant case, the assessees' goods were shown to be covered by the general provisions of Notification No. 1/93-C.E., but, then, the Revenue has been able to establish that the goods bearing the brand names of another person were covered by the exception laid down in para 4 of the Notification as amended with effect from 1-4-94. The Hon'ble Supreme Court has held in the case of "Mahaan Dairies" (supra) that, in order to claim the benefit of a Notification, the party must strictly comply with the terms of the Notification and that if, on the wordings of the Notification, the benefit is not available, then, by stretching the words of the Notification or by adding words to the Notification, the benefit cannot be conferred. The court has held to the same effect in the case of Rukmani Pakkwell Traders (supra) also. In the case of K. Mohan & Co. Exports (supra), the Hon'ble Supreme Court had occasion to deal with an exemption Notification which granted exemption from payment of duty to all excisable goods other than those specified in the Table annexed to the Notification and it was held that the onus of showing that the goods were covered by the exclusion was on the department. There is no controversy about this legal position either. The question is whether the department has succeeded in this case to show that the branded goods cleared by the respondents during the relevant periods attracted para 4 of Notification No. 1/93-C.E. (as amended). We have already found that the Revenue has succeeded in discharging this burden.

15. The Revenue has relied on the Tribunal's decision in the case of Kores India Ltd. (supra). In that case, the issue related to denial of SSI exemption to M/s. Econoprints Stencils Pvt. Ltd. (ESPL, for short) on the ground that the goods manufactured and cleared by them was bearing the brand name "ECONOPRINT" belonging to M/s. Kores India Ltd. A report of the Examiner of Trade Marks showed that M/s. Kores India Ltd. continued to be the proprietor of the brand name. Even M/s. ESPL admitted that the brand name was owned by M/s. Kores India Ltd. They could not produce any proof to show that the brand name was assigned to them by M/s. Kores India Ltd., who were dealing in goods manufactured by M/s. ESPL. In the absence of evidence of the brand name having been assigned to M/s. ESPL by M/s. Kores India Ltd. for the period of dispute, the Tribunal denied the benefit of Notification No. 1/93-C.E. to M/s. ESPL. In the case of Chhaganlal Sharma (supra) cited by ld. SDR, Shri Chhaganlal Sharma's manufacturing unit (M/s. C.H. Herbs) cleared their goods under the brand name "An-Herb" owned by M/s. Anzalp Pharmaceuticals Pvt. Ltd., during the period of dispute. The assessee claimed that the brand name had been assigned to them by M/s. Anzalp. The Tribunal found that a sale deed in respect of the brand name was executed on 18-10-97 by M/s. Anzalp in favour of the assessee after Central Excise officers had visited the assessee's premises. There was no reliable evidence of the brand name having been assigned to the assessee prior to the date of the sale deed. Accordingly, it was held that during the period of dispute (prior to 18-10-97), the brand name used by the assessee on their goods belonged to another person (Anzalp) and, therefore, they were not eligible for the benefit of SSI exemption in respect of the goods. In the instant case also, there is no evidence of the brand names/trade marks having been 'assigned' to the respondents by Shri K.P.R. Sakthivel. On the contrary, the Revenue has shown that, during the periods of dispute, the brand names belonged to Shri K.P.R. Sakthivel. We have also considered the decisions in Mamma Products (supra) and Bhalla Enterprises (supra) cited by ld. Counsel and we find that none of these decisions can be applied to the facts of the present case inasmuch as in the instant case the respondents and Shri Sakthivel have not been shown to have jointly owned, or be equally entitled to, the brand names in question.

16. The judgment passed by the ld. Single Judge of the High Court in the writ petitions filed by the respondents held that the respondents were not entitled to the benefit of Notification 1/93-C.E. (as amended) as their goods were cleared under the brand names belonging to another person (Shri K.P.R. Sakthivel). Ld. Counsel has argued that nothing contained in this judgment could be relied on inasmuch as the said judgment was set aside by a Division Bench of the Court. We have already extracted the relevant portion of the Division Bench judgment vide para 3 of this order. Their lordships were remanding the cases to the adjudicating authorities, upon finding that those authorities had not decided on the issue whether para 4 of Notification 1/93-C.E. (as amended) was applicable only if different users of the brand name used it on identical goods. The remand order accordingly required the adjudicating authorities to determine the classification of the goods manufactured by the writ-appellants, i.e. to ascertain as to whether they were manufacturing identical goods or not. But the Hon'ble Supreme Court has since held vide para 6 of Rukmani Pakkwell Traders (supra) and para 6 of Mahaan Dairies (supra) that even if the goods are different, so long as the trade name or brand name of another person is used, the benefit of SSI exemption would not be available. In any case, the fact remains that the findings recorded in relation to applicability of para 4 of Notification 1/93-C.E. (as amended) to the goods in question, by ld. Single Judge of the High Court were not interfered with by the Division Bench. Hence we do not think that those findings have no persuasive effect, it was rightly held by the ld. Single Judge that the brand names in question had been registered in the name of Shri K.P.R. Sakthivel and that other petitioners were using the brand names registered in the name of the said K.P.R. Sakthivel, merely by virtue of the permission granted. The ld. Judge observed that the above factual position by itself was sufficient to reject their claim for exemption in view of the specific provision contained in para 4 of thse Notification. In another part of his judgment, ld. Single Judge observed thus : "The provisions contained in Paragraph 4 of the notification have been devised to avoid evasion of tax by unscrupulous and unjust manipulations or device and consequently it requires to be construed strictly, being a notification relating to exemption, and against the person claiming exemption. Otherwise, the very object of introducing such a provision would be completely defeated".

17. Following the rule of strict construction laid down by the Hon'ble High Court and the Hon'ble Supreme Court, we hold that the respondents were not eligible for the benefit of exemption under. Notification No. 1/93-C.E. (as amended) for any period from 1-4-94 in respect of the goods cleared by them under the brand names/trade marks belonging to Shri K.P.R. Sakthivel. In the result, the impugned orders are not sustainable.

18. The impugned orders are set aside and the appeals are allowed.

(Pronounced in open Court on 26-4-2005)