GANDHINAGAR BOTTLING PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) M/s. Gandhinagar Bottling Private Limited, petitioner No. 1 is a company engaged in the business of manufacture of aerated waters. It manufactures aerated waters under the brand name of 'CAMPA' being owned by a company called Campa Beverages Private Limited having its registered office at New Delhi. The second petitioner is a Director of petitioner No. 1-Company. The petitioners have challenged the validity of the Notification No. 223 of 1987 dated 22/09/1987 whereby Small Scale Exemption Notification No. 175 of 1986 dated 1/03/1986 was amended inasmuch as it has provided that the exemption contained in the Notification No. 175 of 1986 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 grant of exemption. It is the contention of the petitioner that the petitioner is a small scale manufacture manufacturing aerated waters by using a brand name 'CAMPA'. For this purpose necessary agreement has been arrived at between the petitioner-Company and the Campa Beverages Private Limited. The petitioner-Company purchased syrup (concentrate) from the above named company for the manufacture of soft drinks. It is further contended that except the agreement (Annexure 'C') the petitioners are not having any relationship with the said company and therefore, as the petitioner is a small scale company, the petitioner is entitled to have exemption benefit as per the Notification No. 175 of 1986 dated 1/03/1986, but the said benefit is arbitrarily withdrawn by the impugned notification.

(2.) Mr. Joshi, learned Advocate appearing on behalf of the petitioners, vehemently submitted that by the Notification No. 175 of 1986 the petitioners were exempted from payment of the excise duty and that exemption is withdrawn by Notification No. 223 of 1987 dated 22/09/1987 by adding paragraph 7 to the Notification No. 175 of 1986. It is his contention that the withdrawal Notification is arbitrary and discriminatory inasmuch as even though the petitioner is small scale unit, the benefit of exemption is withdrawn only on the ground that it uses the brand name or trade name of another company which is not eligible for grant of exemption.

(3.) For appreciating the contention of the learned Advocate, it would be necessary to refer to Notification No. 175 of 1986-C. E. Total exemption on concessional rate of excise duty is provided to manufacturers of the specified goods on the basis of aggregate value of its cliarances. The relevant part thereof is as under :