1. The petitioners in these writ petitions have filed these petitions under Article 226 of the Constitution of India, for the issuance of a writ quashing the proceedings of the second respondent - Collector of Central Excise, Madurai, in his C. No. V/ID/15/3/82, CX-3 Order No. 66/87, dated 3.11.1987, and to pass such further or other necessary orders. As these writ petitions arise out of a common order they are dealt with together.
2. The brief facts of the case are these : These six petitioners in these six writ petitions are different partnership or proprietary concerns engaged in the manufacture and sale of aerated waters. The following are the particulars relating to their name, constitution, date of establishment, etc. :
S. W.P. Name of Proprietary or Name of Date of
No. No. Unit partnership proprietor establishment
of 1987 concern or partners
(1) (2) (3) (4) (5) (6)
1. 12711 Sri Pillaiyar Proprietary Vetrivel 1.4.1982
2. 12712 Mappillai Partnership 1. G. Thangamani 1909
Vinayagar 2. Kamakshi Aerated Water
3. 12713 Sri Mappillai Partnership 1. Kadirvelu 1909
Vinayagar 2. Balamuruganandam Aerated Water
4. 12714 Sri Anaimugan Proprietary Neethi Mallika 28.11.1982
5. 12715 Sri Ganesh Proprietary K.B. Malini 1.3.1982
6. 12716 Sri Vignesh Partnership 1. M.A. Kandasami 11.3.1982
Soda Factory 2. R. Pappathiammal -------------------------------------------------------------------------------- --------------
The petitioners are independent concerns having their own separate registration under the Tamil Nadu General Sales tax and separate income tax assessments, separate Small Scale Industries Certificate and separate manufacturing places.
3. On 31st July, 1985 the Superintendent of Central Excise, Madurai, issued a common show cause notice to all petitioners, alleging that they have been using a common trade mark viz., 'Sri Ganesh', that the total value of clearance of aerated water from these six units during the financial year 1981-82 had exceeded Rs. 15,00,000 and that they are not eligible to avail of any duty exemption is respect of the clearance made by their respective factories from 1.3.1982, onwards in terms of Notification No. 31/82, superseded by a Notification No. 148/82-C.E., dated 22.4.1982, issued by the Government of India in the Ministry of Finance in exercise of the powers conferred on them by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944. According to this notice the six units have deliberately suppressed the fact of using the common brand name 'Sri Ganesh' with intention to evade payment of Central Excise duty and had thereby contravened Rules 9(1), 52, 52-A, 53, 173-B, 173-C, 173-G and 226 of the Central Excise Rules. The petitioners were therefore called upon to show cause why a penalty under Rules 9(2), 52-A, 173-Q and 226 of the Central Excise Rules should not be imposed upon these six units separately and pay duty as specified in Annexure A to the said notice from each unit in respect of clearance of aerated waters made therefrom.
4. The petitioners sent identical replies claiming that these six units are not common having common business or interest, that the constitution of each unit has been separately approved by the sales tax and Income-tax Authorities and hence the manufacture of aerated water attributed to these units cannot be said to be the production or manufacture on behalf of one the same manufacturer. They also denied that they are using common trade mark or brand name which were as follows :-
------------------------------------------------------------------------ S. No. Name of the Unit Trade name or brand name
1. Sri Pillaiyar Soda Factory Sri Pillaiyar
2. Sri Mappillai Vinayagar Sri Mappillai Vina-yagar
3. Sri Mappillai Vinayagar Aerated Sri Mappillai Water Industry, Vina-yagar
Madurai - W.P. 12716/87
4. Sri Anaimugan Soda Sri Anaimugam Factory - W.P. 12714/87
5. Sri Ganesh Soda Sri Ganesh Factory - W.P. 12715/87
6 Sri Vignesh Soda Sri Vignesh Factory - W.P. 12716/87
The petitioners, therefore, claimed that they are entitled to exemption from duty in pursuance of Notification No. 148/82-C.E., dated 22.4.1982.
5. The second respondent, Collector of Central Excise, Madurai by his impugned order dated 3.11.1981, held that the production of aerated waters in the six units cannot be said to be the production of one manufacturer but the usage of identical trade marks or closely similar brand names would disentitle them to the exemption under the aforesaid notification and ordered payment of Central Excise duty of Rs. 6,86,134.36 by the six units and imposed a penalty of Rs. 40,000 on Sri Pillaiyar Soda Factory, Madurai - W.P. 12711/87; Rs. 5000 on Sri Mappillai Vinayagar Aerated Water Industry, Dindigul - W.P. 12712/87; Rs. 15000 on Sri Mappillai Vinayagar Aerated Water Industry, Madurai - W.P. 12713/87; Rs. 25000 on Sri Anaimugan Soda Factory, Madurai - W.P. 12714/87; Rs. 50,000 on Sri Ganesh Soda Factory, Trichi - W.P. 12715/87, and Rs. 30,000 on Sri Vignesh Soda Factory, Madurai - W.P. 12716/87. It is to quash these proceedings of the second respondent - Collector of Central Excise, Madurai, the petitioners have filed these writ petitions.
6. The petitions are resisted by the respondents. The Assistant Collector of Central Excise has filed a counter affidavit. It is contended that the writ petitions are not maintainable and have to be summarily dismissed as the petitioners have filed these writ petitions without exhausting the statutory remedies available under the Central Excises and Salt Act, 1944. It is pointed out that under Section 35B an appeal against the order of the Collector lies to the Customs, Excise & Gold (Control) Appellate Tribunal, under Section 35-G(1) a reference lies to this Court; under Section 35-L an appeal lies to the Supreme Court from the order of the Customs, Excise & Gold (Control) Appellate Tribunal. The petitioners are not entitled to seek the extraordinary jurisdiction of this Court without available of the remedies provided under the Act. It is also pointed out that the petitioners have preferred these writ petitions in order to escape paying predeposit of penalty and duty as laid down in Section 35-F of the Act. It is further contended by the respondents that the petitioners have started different factories under different names only with a view to availing of the benefit of Notification No. 31/82, superseded by the Notification No. 148/82, and claiming tax exemptions. The trade names are quite synonymous to each other so as to fit in the trade names of Ganesh image imprinted on the bottles. The petitioners are not, therefore, entitled of claim exemption.
7. The salient features of Notification No. 148/82-C.E., dated 22.4.1982, which has superseded the earlier Notification No. 31/82, dated 22.2.1982, which are necessary for the purpose of the decisions in these writ petitions are these -
(1) In the case of first clearance of aerated waters upto an aggregate value not exceeding Rs. 7,50,000;
(a) on common trade mark aerated waters forming part of such first clearance from so much of the duty of excise leviable thereon as is in excess of 50% of such duty;
(b) on other aerated waters forming part of such first clearance from the whole of the duty of excise leviable thereon.
(2) In case of the clearance (being clearance of aerated waters of an aggregate value not exceeding Rs. Seven and a half lakh) immediately following the said first clearance of the value specified in clause (a) -
(a) on common trade mark aerated water forming part of such clearance, from so much of the duty of excise leviable thereon under the said item as is in excess of fifty per cent of such duty';
(b) on other aerated waters forming part of such clearances, from so much of the duty of excise leviable thereon under the said item as is in excess of seventy five per cent of such duty;
(3)(a) 'common trade mark aerated waters' means aerated waters -
(i) which are sold under a trade mark, registered under the Trade and Merchandize Marks Act, 1958 (43 of 1958), or not, or under a brand name; and
(ii) which are manufactured with the same trade mark or brand name in more than one factory (whether belonging to one or more manufacturers); and
(iii) the aggregate value of clearance whereof from all such factories taken together had exceeded Rs. fifteen lakhs during the preceding financial year."
8. The second respondent, Collector of Central Excise, Madurai in his impugned order dated 3.11.1987 has posed for himself the following two questions for determination - (i) Whether the production of aerated waters in respect of the six units charged can be considered to be the production of one manufacturer for and on behalf of the other units which would disentitle the units to claim individual exemptions under Notification No. 31/82, dated 28.2.1982, and subsequently under Notification No. 148/82, dated 22.4.1982, and (2) Whether the six units have used common trade mark or brand name which would disentitle them to the exemption envisaged under the said notification ? In regard to the first point, the Collector has observed as follows :-
"There is no doubt that all the six units are owned by related persons of Sri M. A. Kandaswami, the head of the family and the partners and proprietors in the six units are his blood relatives. But this evidence alone would not disentitle them from availing the disputed exemption. There is no doubt that these six units are properly constituted as separate proprietary/partnership concerns and they have got their own separate sales tax registrations and they assessed differently for the purpose of income tax etc. Even the Central Excise Department itself have either granted licences to them or separately accepted their declarations for the purpose of availing the exemption. There is no suppression of facts of furnishing of any mis-statement by the licencees in this regard. So the charge as per the first allegation is not proved for want of evidence."
9. On the second question, while conceding that the brand names for the six units were somewhat different viz., Sri Vignesh, Sri Pillaiyar, Sri Ganesh, Sri Anaimugam, Mappillai Vinayakar etc. he held that all these brand names were deceptively common i.e., 'Sri Ganesh' their family deity. These names are only synonyms of the same deity Sri Ganesh. Excepting Anaimugam Soda Factory the other five units used two varieties of glass bottles for filling up aerated waters with the figures of their family deity 'Sri Pillaiyar' or otherwise called 'Sri Ganesh or Sri Vignesh' embossed on the bottles. In respect of the bottles used for filling of flavoured drinks the figure of Pillaiyar is printed on the bottles legibly. The Collector of Central Excise therefore, concluded that the brand names were deceptively similar to each other. As the products of the six units are marketed under common trade mark or brand name, the petitioners are not entitled for separate exemption under Notification No. 148/82, dated 22.4.1982. He accordingly imposed the duty and penalty as stated above.
10. It is clear from the impugned order of the Collector of Central Excise, that Sri Mappillai Vinayakar Aerated Water Industry, Dindigul and Sri Mappillai Vinayagar Aerated Industry, Madurai, are using the trade mark or brand name 'Sri Mappillai Vinayagar' while the other four units are using the trade mark or brand name of Sri Vignesh, Sri Pilliyar, Sri Ganesh and Sri Anaimugam. The five trade names or brand names which are in vogue are Sri Mappillai Vinayagar, Sri Pillaiyar, Sri Ganesh, Sri Vignesh and Sri Anaimugam. These five trade marks or brand names are not the same and it is not the case of the Collector of Central Excise that they are the same. But, according to him, they are identical with and deceptively similar to one another.
11. The term 'deceptively similar' is defined in Section 2(1)(d) of the Trade and Merchandize Marks Act, 1955 thus -
"A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion. For deceptive similarity it is not sufficient if there is some sort of resemblance; the resemblance must be such as to be likely to deceive or cause confusion."
The first thing to be considered is, whether there is visual or phonetic similarity. Two marks may be calculated to deceive either by appealing to the eye or to the ear or one appealing to the eye and one to the ear. These five marks stated above have neither phonetic nor visual similarity. The fact that these five names referred to the deity Sri Ganesh cannot lead to the conclusion that they are identical with or deceptively similar to one another. Like Sri Ganesh, his younger brother Lord Muruga has also several names such as Subramaniam, Arumugham, Kandan, Velan, Senthil, Kumaran Palaniyandi, Shanmugham, Karthekeyan and Saravanan and the use of these different names as different brand names is not likely to deceive or cause confusion in the mind of the consumer merely because all these names refer to Lord Muruga. No doubt, in the bottles used by four units the figure of Sri Pilliayar is embossed or painted in the bottles. But, this device is not the distinctive feature. The names are the distinctive features and they are printed in bold labels and affixed in the bottles of the respective units. According to the petitioners, such bottles are used by the other manufacturers of aerated waters also and it is in a way admitted by the Collector of Central Excise when it says 'it may be a fact that these same bottles were supplied to other aerated water manufacturers'. There is, therefore, no room for any consumer to mistake the one for the other. The conclusion of the second respondent Collector of Central Excise that these trade marks are identical with and deceptively similar to one another is patently unreasonable.
12. Assuming without admitting that these five trade marks or brand names are deceptively similar to one another, can the petitioner be said to be manufacturing and selling 'common trade mark aerated waters'. The term 'common trade mark aerated waters' is defined thus under Explanation 1 to Notification No. 148/82-C.E., dated 22.4.1982 :
"'Common trade mark aerated waters' means aerated waters -
(i) which are sold under a trade mark, registered under the Trade and Merchandize Marks Act, 1958 (43 of 1958) or not, or under a brand name; and
(ii) which are manufactured with the same trade mark or brand name in more than one factory (whether belonging to one or more manufacturers); and
(iii) the aggregate value of clearness whereof from all such factories taken together had exceeded Rs. fifteen lakhs during the preceding financial year."
As per the above explanation, the manufacture and sale must be with the 'same' trade mark or brand name and not with 'similar' trade mark or brand name. The use of the same trade mark is different from the use of similar trade mark. The former denotes the very same thing, the exact replica, while the latter denotes likeness in all essential features so as to cause confusion. If the intention of the authorities issuing the notification were to include similar trade mark or brand name, they would have added the words 'or similar' after the word 'same' in clause (ii) above. From the fact that the petitioners are manufacturing and selling under similar trade marks or brand names, however, deceptive they may be, it cannot be said that they are dealing in 'common trade mark aerated waters' and they are not therefore disentitled to the exemption from duty under Notification No. 148/82-C.E., dated 22.4.1982. Evidently the second respondent- Collector of Central Excise has failed to correctly interpret the cope of this explanation and has read into it something which is not there. His decision is based on a patent misconstruction of the aforesaid explanations. It follows that the petitioners, who are manufacturing and selling aerated waters under different trade marks or brand names and the value of whose individual clearance of aerated waters does not exceed Rs. seven and a half lakhs are entitled to the benefit of the exemption granted under Notification No. 148/82-C.E., dated 22.4.1982. The order of the Collector levying duty and imposing penalty cannot stand and has to be struck down.
13. It is strenuously contended by Mr. N. Jothi, learned counsel for the Revenue that these writ petitions are not maintainable as the petitioners have not availed of the alternate remedies provided for in the Excise and Salt Act. It is pointed out that under Section 35-B of the Act, the appeal is provided from the order of the Collector of the Customs, Excise and Gold (Control) Appellate Tribunal, under Section 35-G(1) a reference lies to the Tribunal and under Section 35-G(3) to the High Court and an appeal under Section 35L(b) to the Supreme Court from the order of the Tribunal. According to the learned counsel for the Revenue, therefore, the petitioners ought to have resorted to the remedies under the Act instead of invoking the extraordinary jurisdiction of this Court under Art. 226 of the Constitution of India.
14. It is urged by Mr. R. Thyagarajan, learned senior counsel for the petitioners that the availability of alternate remedies is not an absolute bar to the maintainability of the writ petitions and this is a matter of discretion rather than of jurisdiction. Inasmuch as Nainar Sundaram, J. has considered this matter and admitted the writ, his discretion is not liable to be challenged. It is further pointed out that no controversial question of fact is involved in the determination of these writ petitions; what is involved is only an interpretation of Notification No. 148/82-C.E., dated 22.4.1982, and as such there is no bar to the maintainability of the writ petitions. Reliance is sought to be placed on the Bench decision of this Court in Assistant Collector of Central Excise, Customs House, Pondicherry v. New Horizon Sugar Mills Pvt. Ltd., Pondicherry, 1988 ELT 10, in which Ismail, J. (as he then was) speaking for the Bench observed thus :
"The matter in controversy in the writ petitions did not involve any investigation into controverted questions of fact, and merely involved of an interpretation of the statutory notification of the Government of India referred to above. In such a context, we are of the opinion that the respondent was justified in approaching this Court under Art. 226 of the Constitution of India and the fact that the respondent should have filed a suit is no bar to this Court granting relief under Art. 226 of the Constitution of India."
I respectfully agree with the aforesaid observation of the learned Judge. In Hirday Narain v. Income Tax Officer, Barbilly, AIR 1971 SC 683, the Supreme Court observed -
"We are unable to hold that because a revision application could have been moved for an order correcting an order of the Income-tax Officer under Section 35, but not moved, the High Court would be justified in dismissing as not maintainable the writ petition which was entertained and heard on merits."
I hold, therefore, that these writ petitions cannot be dismissed at this stage.
15. Further, I have held that the order of Collector of Central Excise holding that the five trade marks or brand names are deceptively similar is patently unreasonable, and his interpretation of Explanation I to Notification No. 148/82-C.E., dated 22.4.1982 is based on an incorrect interpretation thereof. In such a case, the remedy by way of a writ petition under Art. 226 of the Constitution of India is always maintainable. In Hino Syntex Ltd. v. Union of India, 1985 ELT 35 MP, it is pointed out by the learned Judge that -
"However, the Court's power to interfere is not restricted to the cases where the decision of the department is totally perverse or such as no reasonable person could ever take but the Court can interfere, if the conclusive arrived is totally unreasonable or the decision is based on patent misconstruction of the Entry, when the findings of the department as to whether the particular goods are covered by particular item in the Excise Tariff are patently erroneous, or the decision is arrived at on the basis of irrelevant facts or irrelevant construction and that the decision is a result of ignoring relevant facts or relevant material available on record and that when the decision discloses a wholly erroneous approach to the problem on the part of the Department."
In Venkateswara & Co. v. Ramchand Chobraj, 1983 ELT 132 SC, the Supreme Court pointed out that where the order levying duty at the higher rate is based on an erroneous interpretation of the Tariff entry and that too on the Board's ruling, the alternate remedy being facility, would not operate as a bar in exercising writ jurisdiction under Art. 226 of the Constitution of India. In the circumstances of this case, therefore, these writ petitions are maintainable.
16. In Nebha and Co. v. State of Gujarat, , relied on by the counsel for the Revenue, the petitioners filed the writ petitions in the Supreme Court challenging the omission of the licensing authority to dispose of their application for an import licence under the Bombay Prohibition Act and during the pendency of the petitions their application has been considered and has been rejected. The Supreme Court, therefore, held that it would be open to the petitioners to avail of their remedies by way of an appeal or revision under the Bombay Prohibition Act as the matter raises questions of fact and cannot be the subject of adjudication conveniently in the Supreme Court in those writs. This decision does not, therefore, support the case of the Revenue against maintainability of these writ petitions. The other decisions relied on viz., Titagur Paper Mills Co. Ltd. v. Pinaki Sengupta, . The Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd., , Garware Plastics and Polyesters Ltd. v. Union of India and Others, 1980 ELT 449 Bombay; and Raja Beedi Factory v. Collector of Central Excise and Others, W.A. 257 of 1988 of this court, are decisions in which the impugned order did not suffer from the vice of patent incorrectness or manifest misrepresentation as is the case on hand. These decisions are not, therefore, relevant for the purpose of this case.
17. In the result, the writ petitions are allowed, the order of the second respondent, Collector of Central Excise, Madurai in his C. No. V/ID/15/3/82/6X-3 Order No. 66/87 dated 3.11.1987 is quashed. No costs.