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Ultra Filter (India) Pvt. Ltd. Vs. Commissioner of C. Ex. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT
Decided On
Judge
Reported in(2002)(145)ELT362Tri(Bang.)
AppellantUltra Filter (India) Pvt. Ltd.
RespondentCommissioner of C. Ex.
Excerpt:
.....appellants have been incorporated under the provisions of companies act, 1956 on 31-12-1985 as 'ultrafilter (india) private limited' with the registrar of companies and there is force in the plea being made before us, that the appellant company has every right to use its registered name on its products. we would therefore not come to the same conclusions as the lower authorities as regards, the name and address of the registered company if and when it appears on the products to associate the same with the german company and the benefit of notification is not available. (b) we find that the adjudicator, besides the finding of affixation of the name of appellant company has also found the words and style 'ultra filter made in india' to be additional markings affixed on the products......
Judgment:
1. The appellant is a registered manufacturer of filters and was clearing the goods manufactured by them, after getting the classification lists duly approved for eligibility of benefit of Notification No. 175/86 since 1989, 2. A show cause notice was issued to them dated 1-9-93 proposing the denial of benefit of Notification No. 175/86 on the grounds that during the period 1988-89 (from 1-8-88 onwards) to 1991-92, as they had cleared 'filters' with the Brand name of M/s Ultra Filter GMBH, Germany by suppressing the fact of having entered into Technical Collaboration with the German Company, using patents and affixing the brand name of the collaborator company, who were not eligible for the exemption of Notification No, 175/86. This activity was alleged to be with an intention to evade duty.

(a) After considering the Articles of Collaboration Agreement specially Articles 1.2 apart from providing for transfer of Technical information the design of the product was also provided.

While Training WS provided for by Article 3; Article spoke of non transferable right to manufacture the products and sell as per condition with restriction imposed. Article 8 provided for payments, while 9 provided for improvement communication of the product and 11.1 provided quality specification and 11.2 states - "that the contract products so manufactured shall either in the request of licensor, or at the request of the licencee agreed to by the licensor - be marked with a designation indicating that they are made under licence of the Licensor. 'Ultra Filter made in India' instead of made in West Germany. Article 11.2 further states that the layout of the designation and any other markings on the contract product as well as the use and layout of name of the licensor shall be made with the prior written approval of the licensor." Relying on the provisions & terms therein, he concluded that the name/words "Ultra Filter (I) Pvt. Ltd./Ultra Filter Made in India" affixed indicate a connection with M/s. Ultra Filter GMBH Germany and these markings fall within the ambit of definition of brand name/trade name as in Explanation VIII of Notification 175/86-CE. dated 1-3-86. He rejected the appellants contention of using their company's name & address. He was fortified in his belief from the Technical Brochure of the appellants products indicating the use of LOGO of the German Company which he found to be corroborated by the statement of Administrative Manager Shri Srinivasa Rao and that this indicating a connection in course of Trade between the products and the collaborator & users of the 'filters' well versed in the products of German Company would associate the products herein with the foreign company and hence he denied the eligibility.

(b) He, thereafter rejected the other submissions made and held the notice not barred by limitation and confirmed the duty demand of Rs. 28,99,426/- on goods, cleared during the impugned period after availing the benefit of exemption of Notification 175/86. He also imposed a penalty of Rs. 2 lakhs under Rule 173Q(1) on the appellant company.

(a) The appellants have submitted before us that what they have 'affixed' to the products is the name and address of the company.

The learned Adjudicator's finding is to the contrary. We, therefore, inspected the photographs, the Trade Brochures and find that the products bear the following marks/indications - The appellants have been incorporated under the provisions of Companies Act, 1956 on 31-12-1985 as 'ULTRAFILTER (INDIA) PRIVATE LIMITED' with the Registrar of Companies and there is force in the plea being made before us, that the appellant company has every right to use its registered name on its products. We would therefore not come to the same conclusions as the lower authorities as regards, the name and address of the registered company if and when it appears on the products to associate the same with the German Company and the benefit of notification is not available.

(b) We find that the adjudicator, besides the finding of affixation of the name of appellant company has also found the words and style 'Ultra Filter Made in India' to be additional markings affixed on the products. From the paper book photocopies on record of the technical Brochures, we find the words and style - on the products from the paper book II, we find a photocopy of an Original Suit No. 54 of 1999, filed before the Additional Civil Judge (Senior Division) Bangalore Rural District by the constituted Attorney Sri A. Vaitheeswaran as plaintiff representing ULTRAFILTER GMBH a company in Germany and the appellant herein as Defendant No. 1 in that suit. The plaintiff in that suit submits, that the term 'Ultra filter' was coined by the Chairman of the Plaintiff Company and is associated with the Plaintiff Company all over the World. It is also trading name and style of the Plaintiff Company. The Plaintiff company is the registered proprietor of the word 'Ultra filter' in many Countries. The Defendant No. 1 and the plaintiff had entered into 'A share Holders Partnership agreement' and other agreements, viz. Name Protection Agreement, Distributor Agreement & Trade marks Registered user Agreement. The Defendant 1 company could use the name 'ultra filter' in connection with the products, in terms of the other agreements and on termination of these agreements, the plaintiff could demand the deletion of the word 'ultra filter' and its use in the defendants company's name and use elsewhere. Vide this suit, it has been pleaded before the Court, to issue an injunction; restraining Defendant for use of the name 'ultra filter' as part of corporate name and elsewhere since the three agreements have been terminated. These agreements are not before us. Therefore, we cannot decide whether the marks - were assigned to the appellant by these agreements and what is the ownership status. If the same are assigned or ownership by the appellants before us is detected then it would not call for the bar of Explanation VIII of Notification 175/86. This important aspect of the ownership of the mark 'ultra filter' and its ownership is disputed and is now before the Hon'ble Additional Civil Judge Bangalore Rural. The outcome thereof will have an important bearing on the claim of the appellants before the Central Excise Authority to determine if they have used/not used anybody else's name/marks etc. but have used their own mark/name. We would therefore, set aside the order and remand the matter back to the Adjudicator to decide the matter afresh after determining the ownership of the marks 'ultra filter' being affixed to the products.

5. In view of our findings herein, the appeal is allowed as remand for de novo adjudication.


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