ORDER
U.L. Bhat, J. (President)
1. The order-in-original dated 4-3-1996 passed by the Commissioner of Central Excise, New Delhi is under challenge in this appeal.
2. Appellant engaged in the manufacture of various kinds of machinery and systems such as ejector, vaccum system, evaporation plant, scrubbing system etc. was availing invoice price procedure and paying duty on the basis of the invoice price shown in the various invoices. The dispute relates to the period from 1988 to July 1992 covering supplies made as per orders placed by several parties including M/s. Lipton India Ltd., M/s. Hindustan Lever Ltd. etc. Appellant had availed of the benefit of partial exemption Notification 175/86. Show cause notice was issued demanding differential duty of Rs. 32,38,204/- on the ground that the benefit of notification was not available inasmuch as appellant was using the brand name of the technical collaborator which fact had been suppressed from the knowledge of the department. Accordingly, the larger period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944 was sought to availed. Appellant resisted the notice alleging that collaboration Agreement related only to drawings and designs and nothing more and which royalty and engineering fees had been paid and the Agreement did not provide for use by appellant of the brand name of the collaborator and in the fact brand name had not been used and therefore, the appellant did not fall within the exception contemplated in the notification.
3. This order was set aside by the Tribunal and the case was remanded to enable the adjudicating authority to decide the question relating to the brand name aspect and also to decide a new point raised before the Tribunal to the effect that the various items were manufactured by the appellant and cleared from the factory and removed to the sites of the buyers and in the course of assembly and installation they became part of immovable property and hence not excisable goods. After remand, the Commissioner held against the appellant on both these aspects and confirmed the demand.
4. According to para 7 of the exemption Notification 175/86 the notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for grant of exemption under the notification. Explanation VIII to paragraph 7 of the Notification reads thus :-
‘”Brand name’ or ‘trade name’ shall mean a brand name or trade name, whether registered or not, that is to say a name or a mark, such as symbol, monogram, label, signature of invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person”.
5. In the instant case, the Collaboration Agreement required the appellant to affix on every system manufactured on the basis of designs and drawings provided by the foreign collaborator, name plate declaring that the same are manufactured in technical collaboration with the foreign collaborator. Accordingly, on the various components of the systems in respect of which the demand has been made, appellant had affixed name plates declaring that the same were manufactured in technical collaboration with “GEA Wiegand GMBH Ltd. West Germany”. The name of the appellant is M/s. Wiegand India Pvt. Ltd. On the basis of the contents of the name plate, the Commissioner held that this was a case where brand name of another manufacturer who was not eligible for the benefit of exemption notification was used by the assessee and therefore, the benefit of the notification would not be available. The Commissioner placed reliance on the decisions of the Tribunal in Fcsto Controls (P) Ltd. v. Collector of Central Excise, Bangalore 1994 (72) E.L.T. 919 (Tribunal) and Sonoma Aromatics (P) Ltd. v. Collector of Central Excise, Bangalore 1995 (78) E.L.T. 285. In the case of Sonoma Annuities (P) Ltd. the assessee was using on the product brand name “H&R” with a logo of a humming bird used by the German Company, “Hermann & Reimer”. It was noticed that the name and style of writing abbreviations “H&R”, the colours used and the logo of the humming bird with a flower in the beak were identical with the German Company’s logo and brand name. The Tribunal held that the assessee as an agent of the foreign company was using the foreign company’s brand name, colour and logo on the products and selling both products with the foreign logo and brand name and since the foreign company was not entitled to the benefit of Notification, the assessee was also not entitled to the benefit of the Notification. In Festo Controls Pvt. Ltd. the goods were manufactured as per the design and specification of the collaborator “Festo K.G. Germany”. The collaborator had substantial interest in the assessee’s company. The word “Festo” had assumed a recognisable trade and brand name in the market. It was held that though the brand name of the collaborator was “Festo Pneumatic” the use of the word “Festo” on the assessee’s products must be regarded as use of the brand name of another company.
6. The question for consideration is to what extent the decision in-Festo Controls (P) Ltd. is effected by the latter decision of the Supreme Court in Astra Pharmaceuticals (P) Ltd. v. Collector of Central Excise 1995 (75) E.L.T. 214. This was a case of manufacture of patent and proprietary medicines dutiable either under erstwhile Tariff Item 14E or Tariff Item 68. Goods falling under Tariff Item 68 were wholly exempt under Notification No. 55/75. The assessee manufactured pharmacopoeia! and non-pharmacopoeial medicines, one of the items being “20% Dextrose injection”. This is a trade name in the Indian Pharmacopoeia. Appellant cleared Dextrose without payment of duty. The question at issue was decided in the light of Tariff Item 14E and Explanation I thereto. Explanation I thereto reads thus :-
“Explanation I. – Patent or Proprietary medicines means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals, which bears either on itself or on its container or both, a name which is not specified in a monograph in a Pharmacopoeia Formularly or other publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is a name or a registered trade mark under the Trade and Merchandise Marks Act, 1958 (43 of 1958) or any other mark such as symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating, or so as to indicate a connection in the course of trade between the medicine and some person, having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person.”
We find that the definition of brand name in Notification No. 175/86 and the definition in Explanation I to erstwhile Tariff Item 14E are almost identical. The cover used for the medicine in the instant case carried the name “AP. Astra”. According to the department use of the words “AP. Astra” amounted to use of brand name. The Supreme Court held that the medicine in question was not registered under the Trade & Merchandise Marks Act and would attract levy only if the container or the packing carried any distinctive marks so as to establish relation between the medicine and the manufacturer and the identification of medicine should not be equated with the produce mark. The Court held that “AP” or “Astra” on the/container or packing was used to project the image of manufacturer generally. It did not establish any relationship between the mark and the medicine. For instance, if the appellant instead of using “Dextruse infections” would have described it as “Astra injections or Astra Dextrose injections” it could be said that a relationship between the monograph and the medicine was established. In the case dealt with it was only a monograph to identify the manufacturer. It appears to us that the decision of the Supreme Court marks a departure from the principle laid down in Festo Controls (P) Ltd. and we are bound to follow the decision of the Supreme Court.
7. In the case at hand, there was no brand name associated with the foreign collaborator which was being used by the assessee. As required under the Collaboration Agreement a name plate was affixed the components or systems indicating that they were manufactured in technical collaboration with the collaborating company. Reference is only to the technical collaboration or know-how. The product was indicated to be that of the assessee himself. In these circumstances, it cannot be said that the relationship between the product and the name had been established, even apart from the circumstances that there is something in common in the names of the assessee as well as the collaborator. The reference to the circumstance that the technical know-how was provided by somebody else cannot be regarded as amounting to using the brand name of another person. In these circumstances, the Commissioner was, in error in taking the view that the brand name of another person had been used by the appellant. We hold that the appellant was entitled to the benefit of the notification.
8. The above finding would be sufficient to dispose of the appeal. Arguments have been advanced before us on the second aspect, namely whether anything had been installed or erected at the sites of the buyers and whether in the course of installation on erection the articles installed and erected became part of immovable property. The Commissioner has gone by the description found in the various contracts and ignoring the circumstance that erection and assembly were also required to be done. In one case erection was to be made by buyer and in another erection was to be made by the assessee himself. Appellant had placed before the Commissioner photos of various installations in order to establish that the various articles had become part of immovable property. The Commissioner has not adverted to the photocopies. The Commissioner has proceeded on the basis that the contracts related to various systems which meant that assembly had taken place in the factory and that excisable goods had come into existence in the factory of the appellant without considering the nature of the articles or the nature of assembly. Whether assembly could be done at all without erection or embedding was not adverted to by the Commissioner.
9. On the question of benefit of notification we have to take a view against the assessee, it could have been necessary to set aside the impugned order on the second aspect and remand the case to the jurisdictional Commissioner for decision afresh after considering the various materials and after inspection of various installations. Since the appellant succeeds on the aspect of notification and since remand is not pressed necessary, we do not propose to remand the case.
10. We set aside the impugned order and allow the appeal. We make it clear that this order shall not stand in the way of either of the parties from raising appropriate contentions in any other adjudication proceedings on the aspect of excisability or otherwise.