KALI AERATED WATER WORKS, SALEM versus COMMNR. OF CENTRAL EXCISE, MADURAI

Citation: [2015] 8 S.C.R. 283 · Decided: 13-05-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Disposed off
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

[2015) 8 S.C.R. 283 
KALI AERATED WATER WORKS, SALEM 
A 
v. 
COMMNR. OF CENTRAL EXCISE, MADURAI 
(Civil Appeal No. 3594 of 2005) 
MAY 13, 2015 
[A.K.SIKRI AND R. F. NARIMAN, JJ.] 
B 
Central Excise Act, 1944: SS/ Exe.mptiori- Notification C 
1193-CE dated 28.2.1993 (as amended by Notification No. 
59194-CE dated 1. 3. 1994) - Brand name of another person 
- Benefit of exemption under the Notification denied by the 
Revenue on the ground that brand name 'Kalimark' which 
belonged to another person was used by appellant on the D 
goods manufactured by it - Held: By virtue of a Family 
Settlement contained in the deed of Mutual Agreement, the 
trade name 'Ka/imark' vested in all the parties including the 
appellant-As per agreement, appellant was allowed to use 
the same and not required to make any payment of royalty E 
to any other party- Thus, appellant was using its own brand 
name 'Kalimark' - Appellant was thus entitled to exemption 
under the Notification. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. F 
3594 of 2005. 
From the Judgment and Order dated 26.04.2005 passed 
by the Customs, Excise and Services Tax Apellate Tribunal, 
South Zonal Bench at Chennai in Appeal No. E/580/2002. 
G 
WITH 
C.A.· NO. 3611AND4387-4392 OF 2005 
283 
H 
284 
SUPREME COURT REPORTS 
[2015] 8 S.C.R. 
A 
R. Venkataramani, Satya Mitra· Garg, Mahaboob Fazil, 
Manju Aggarwal, Neelam Singh, R. Anand Padmanabhan, 
Romil Pathak, Krishna Porchetan, Shashi Bhushan Kumar, 
for the Appellant. 
B 
K. Radhakrishnan, Arijit Prasad, Aruna Gupta, B. Krishna 
c 
Prasad, P. Parmeswaran, Arvind Kumar Sharma for the 
Respondent. 
The Judgment of the Court was delivered by 
A.K.SIKRl,J. 1. It is not in dispute that the appellant herein 
is a Small Scale Industrial Unit (hereinafter referred to SSI Unit) 
and is manufacturing Aerated Water under various brand 
names using the trade mark with the "Kalimark" I Mis.Kali 
D Aerated Water Works" It sought exemption from payment of 
excise duty in terms of Notification 1 /93-CE dated 28.2.1993 
(as amended vide Notification No.59/94-CE dated 1.3.1994) 
for the aforesaid goods manufactured in its factory. This has, 
however, been denied to the assessee by the Department on 
E the ground that the brand name "Kalimark" has been used on 
the goods which belong to Mis. Shri K.P.R.Shakthivel and 
since the assessee is using the aforesaid branc;l name of the 
third party, by virtue of para 4 of the aforesaid Notification the 
exemption would not be allowed to the respondent. This stand 
F taken by the respondent department has been accepted by 
the CESTAT in its impugned judgment. 
2. The Tribunal has noted the fact that business of 
manufacture and sale of Aerated water was started in the name 
G of'KalimarkAerated Water Works' by the HUF of which Mis. 
Shri P.V.S. K.Palaniappa Nadar was the Kar:ta. Later on it 
was converted into a joint family business of Sh. Palaniappa 
Nadar and his three sons and a daughter. At some point of 
time the parties/partners fell apart and entered into a family 
H settlement which is contained in Deed of Mutual Agreement 
KALI AERATED WATER WORKS, SALEM v. COMMNR. 285 
OF CENTRAL EXCISE, MADURAI [A.K.SIKRl,J.] 
dated 12.3.1993. The Tribunal has recorded that in terms of A 
this Mutual Agreement signed between the parties the 
ownership of the aforesaid trademark/brand name 'Kalimark' 
no longer remained with the appellant assessee and it belongs 
to the other party. On this basis it arrived at the finding that the 
appellant has been using the trade mark/brand name of the B 
third party. 
3. We find tHat the aforesaid observation is against the 
record and contrary to the Deed of Mutual Agreement which 
has been entered into between the earstwhile partners. Para C 
9 of the recital to this family arrangement is as under: 
"Since all the parties herein have mutually intend to carry 
forward the reputation and well established Trade Mark 
'KALI MARK' in future also thus carrying out to the future D 
generations, a meeting was held among the parties 
herein, who are the direct male lineal decedents and users 
of established abovesaid Trade marks and who at present 
have interest in various factories being run in the name of 
Kali Aerated Water Works in various parts of Tamil Nadu E 
and. discussed the pros and cons and also to preserve 
the established Trade Name and Trade Marks throughout 
the future generation and agreed on certain terms and 
conditions and all the parties herein hav
Excerpt shown. Read the full judgment & AI analysis in Lexace.