PRINCE VALVES INDUSTRY Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Prince Valves Industry, is whether the excisable goods manufactured by them are bearing brand name of another person making the goods ineligible for exemption from payment of duty under Notification No. 1/93 -CE., dated 28 -2 -1993.

(2.) Shri Lakshmikumaran, learned Advocate, submitted that the Appellants are a partnership firm of which Shri Ram Prakash Sikka is the Managing Partner; that prior to incorporation of the Appellant firm in 1986, Shri Sikka was a partner in M/s. Sant Brass Metal Works (SBM) engaged in the manufacture of cocks and valves of different varieties and grades under the brand 'SANT'; that as Sikka retired in 1986, SBM was dissolved and in terms of Dissolution Deed dated 31 -3 -1986, Shri Ram Prakash Sikka was entitled to use the brand 'SANT' in respect of non -ISI grade cocks and valves; that from this date SBM stopped manufacturing non -ISI grade cocks and valves under the brand 'SANT'; that SBM also issued advertisements in the local newspa per; that a dispute was raised by the Department in July, 1992 about their eligibility to Notification No. 175/86 -CE.; that the Assistant Collector, under Order dated 18 -9 -92, held that they were independently using the brand name 'SANT in their own right as per the terms of agreement and the Dissolution Deed; that thus it was an admitted position that the brand name 'SANT' belonged to the Appellants; that again the Central Excise Department started disputing their eligibility of exemption under successor Notification No. 1 /93 -C.E.; that the Assistant Commissioner has confirmed the demand of duty for the period April, 1995 to July, 1995 under Adjudication Order No. 62/96, dated 18 -6 -96 holding that the agreement was an internal arrangement between two parties so as to avoid internal dispute regarding use of brand name but the fact remained that the Appellants were using registered brand name 'SANT' of another unit, namely SBM; that Commissioner (Appeals) also, under the impugned Order, rejected their appeal on the ground that they had used Trade Mark 'SANT belonging to and registered in the name of another person. The learned Advocate also mentioned that for different period, the Tribunal has upheld the denial of benefit of SSI Notification to the Appellants vide Final Order Nos. 1179 -1181/2000 -B, dated 31 -7 -2000 relying on the decision of Madras High Court in the case of Kali Aerated Water Works v. UOI - 1995 (76) E.L.T. 265 (Mad.); that the Division Bench of the Madras High Court has vacated the findings of the learned Single Judge as reported in Kali Aerated Water Works v. UOI - 2001 (132) E.L.T. 544 (Mad.); that consequently the Final Order dated 31 -7 -2000 in their own case has no application in the present matter.

(3.) The learned Counsel, further, submitted that different cocks and valves have different uses; that the industry recognizes different varieties of cocks and valves and since Sant Valves Pvt. Ltd. have advertised that they are not using 'SANT' brand for non -ISI valves, the question of indicating a connection in the course of trade does not arise which is must as per Explanation IX to Notification No. 1/93 -C.E. He also mentioned that since the Appellants are using the brand name for more than 15 years, such use is covered by the provisions of Section 24 of the Trade and Merchandise Marks Act, 1958 which provides for joint ownership and registration of a brand name; that both the Appellants and Sant Valves (P) Ltd. are dealing with cocks and valves and both have acquired the ownership right over the brand name 'SANT' consequent to the dissolution deed; that in terms of Section 24 of the Trade and Merchandise Marks Act, the ownership over the brand name 'SANT' by them and Sant Valves (P) Ltd. is recognized as joint ownership; that accordingly the benefit of exemption Notification cannot be denied to the Appellants. The learned Advocate also referred to Section 33 of the Trade Marks Act, 1999 regarding 'Effect of acquiescence'. According to this section where the Proprietor of an earlier trade mark has acquiesced for a continuous period of five years in the use of a registered trade mark, being aware of that use, he shall no longer be entitled to apply for a declaration that the registration of the latter trade mark is invalid or to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used. The learned Advocate also referred to Section 30(1)(b) of the Trade and Merchandise Mark Act, 1958 which provides that the use by a person of a trade mark in relation to goods connected in the course of trade with the proprietor or a registered user of the trade mark if the registered proprietor or the registered user conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of trade mark, will not constitute an infringement of the right to the use of a registered trade mark. The learned Counsel, therefore, contended that the situation is not as if one is using the brand name of another; that the Appellants have the ownership over the brand name, especially when such use is for a longer period with acquiescence; that the Appellants have the proprietary right or ownership over the brand name due to long and uninterrupted use of over 16 years; that accordingly the mischief of Para 4 of the Notification No. 1/93 is not attracted.