COMMISSIONER OF CENTRAL EXCISE, TRICHY versus M/S. GRASIM INDUSTRIES LTD.

Citation: [2005] 3 S.C.R. 466 · Decided: 12-04-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Disposed off

Judgment (excerpt)

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A 
COMMISSIONER OF CENTRAL EXCISE, TRICHY 
v. 
MIS. GRASIM INDUSTRIES LTD. 
APRIL 12, 2005 
B 
[S.N. VARIAVA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.] 
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Central Excise Act, 1944; Section 173Q, Notification No. 5198-CE dated 
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2. 6.1998 issued thereunder : 
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Exemption Notification-Applicability of-Held: Name of a well-known 
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cement company was written on the product with the intention of showing a 
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connection between the product and the company in the course of trade-It 
is not necessary that the name or the writing on the pro.duct must always be 
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a brand name or a trade nature in the sense that it is normally understood-
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D Hence assessees not entitled to the benefit of the Notification. 
Words and Phrases : 
'that is to say '-Meaning of in connection with the applicability of 
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Notification No. 5198 CE. 
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E 
Respondent/assessee is a subsidiary company of one Mis. Grasim 
Industries Ltd., the main company. The company using the name of the 
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main company on the cement bags manufactured by them and claimed 
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benefit under Notification No. 5/98 CE. The Revenue held that assessee 
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was not entitled to the benefit of the Notification. Assessee filed an appeal 
F which was allowed by the Tribunal. Hence the present appeal. 
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Disposing of the appeal, the Court 
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HELD : 1.1. There is no denial that Mis. Grasim Industries Ltd. were 
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manufacturer of cement. There is also no denial that the purpose of using 
G the trade name of other company was with an intention of indicating a 
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connection between the product and Mis. Grasim Industries Ltd. In such 
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cases, clearly the assessees were using a trade name of some other company 
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with the purpose of indicating a connection in the course of trade between 
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the product and that person. The Respondents were therefore clearly not 
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466 
C.C.E., TRICHY v. GRASIM INDUSTRIES LTD. 
467 
entitled to the benefit of the Notification. The decision of the Tribunal is A 
therefore clearly erroneous. 1474-H; 475-A-BI 
Astra Pharmaceuticals (P) ltd. v. Collector of Central Excise, 
Chandigarh, reported in (1995) 75 ELT 214 SC, distinguished. 
1.2. It is not necessary that the name or the writing must always be B 
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 C 
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. 
(477-F-G-HI 
1.3. The words "that is to say" qualify the words "brand name or 
trade name" by indicating that these terms must therefore be understood D 
in the context of the words which follow. The words which follow are of 
wide amplitude and include any word, mark, symbol, monogram or label. 
Even a signature of an invented word or any writing would be sufficient 
if it is used in relation to the product for purpose of indicating a connection 
between the product and the other person/company. [478-A-B) 
Nippa Chemicals (P) Ltd. v. Collector of Central Excise, Madras, 
reported in (1998) 100 ELT 490 and Commissioner of Centra( Excise, 
Hyderabadv. Sarat Electronics, reported in (2004) 167 ELT 404, overruled .. 
E 
Royal Hatcheries Pvt. Ltd v. State of A. P., (1994) Supp 1 SCC 429 
and Collector of Central Excise, Goa v. Christine Haden(/) Pvt. Ltd, (1999) F 
113 ELT 591, referred to. 
1.4. The Explanation to the Notification makes it clear that it need 
not be a trade na{lle or brand name as commonly understood. Any name 
or mark or writing, even the name of a company is sufficient so long as it 
is used for the purpose of indicating a connection between the product G 
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and that Company. (479-C-D] 
2. While the conclusions of the Commissioner/Revenue that the 
assesses were not entitled to the benefit of the Notification are correct, 
the fact still remains that the Tribunal has in a number of matters given 
an interpretation as understood by the assessees. It, therefore, cannot be H 
468 
SUPREME COURT REPORTS 
[2005] 3 S.C.R. 
A said that the assesses could nof have taken the view they did. Thus, this is 
a case where penalty should not be imposed. Hence, imposition

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