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Kali Aerated Water Works, Salem v. Commissioner of Central Excise, Madurai

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 3594 of 2005)Decided 13 May 2015
Civil Appeal No. 3594 of 2005
Justice A.K. Sikri · Justice Rohinton Fali Nariman

Background

The appellant, a Small Scale Industrial Unit making aerated water under the "Kalimark" brand, had claimed an excise duty exemption meant for small manufacturers. The Excise Department denied the exemption on the ground that "Kalimark" was actually a third party's brand name, which would disqualify the appellant from the SSI exemption under the relevant notification. This stance had been upheld by the Tribunal (CESTAT). This judgment disposes of C.A. No. 3594 of 2005 together with several connected appeals (C.A. 3611/2005 and C.A. 4387-4392/2005) raising the identical issue.

Decision Breakdown

The Supreme Court found that the Tribunal had misread the family's 1993 "Deed of Mutual Agreement," which in fact preserved and vested the "Kalimark" trade name and mark jointly in all the family members (including the appellant) within their respective marketing territories, rather than transferring exclusive ownership to a single family member. Since the appellant was legally a co-owner/user of its own brand name and not using a genuine "third party's" mark, the exemption-denial ground did not hold up. The Court found the case squarely covered by its recent ruling in CCE, Hyderabad-IV vs. Stangen Immuno Diagnostics (19.3.2015), and allowed all the connected appeals, including this one.

Lesson Learnt

An SSI excise exemption cannot be denied merely because a brand name is shared within an extended family or business group: if a family settlement or agreement shows the appellant genuinely co-owns or is licensed to use that mark, it is not "another person's brand name" for exemption purposes.

Official source (sci.gov.in)View Judgment (PDF)

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