JUDGMENT
Suhas Chandra Sen, J.
1. The petitioner Company is a manufacturer of mechanical power transmission equipments including Vulcan Diaphragm Couplings (flexible) (hereinafter referred to as the said product). For manufacturing the said product, the Petitioner No. 1 has factories at 1/1, Taratala Road, Calcutta and at 12B, Beliaghata Road, Calcutta-15.
2. The Petitioner No. 1 manufactures the said product, out of indigenously-procured raw materials, based on its own design and specification-technology, duly patented in its favour, and sells the same in India. The Petitioner No. 1 uses its own registered trade mark “Vulcan” with or without its own house-mark “ESBI” in respect of the said product of its manufacture. The Petitioner No. 1 is the sole Consultant of M/s. Vulcan Kupplungs-und Getriebebau, Germany, and has Co-operation arrangement for exploring the marketing possibilities in India of the products of the said German Company.
3. The petitioner company is the registered proprietor of the trademark “Vulcan” duly registered under the Trade and Merchandise Marks Act, 1958, Registration Certificate being No. 357227, dated 4th January, 1980 issued by the Registrar of Trade Mark.
4. The case of the petitioner is that it has the exclusive right and authority to use the said registered Trade Mark ‘Vulcan’ in relation to manufacture, sale, supply and/or distribution of the said product and its spares all over India.
5. The Petitioner No. 1 being as SSI Unit had at all material times, until the time hereinafter mentioned, been entitled to certain exemption of Central Excise duty by virtue of a Notification No. 175/86-C.E., dated 1st March, 1986 as amended.
6. The further case of the petitioner is that the Petitioner No. 1 as manufacturer of the said product was granted necessary Central Excise Licence being No. L-4/24/Chapter-8483/R-6/Call-I/86, dated 8th August, 1986. The said product manufactured by the Petitioner No. 1 comes under the purview of Chapter 84 and the Petitioner No. 1 have been paying Central Excise duty at a concessional rate of 10% ad valorem upto sale of Rs. 75,00,000/- in a financial year under the said Notification No. 175/86-C.E., dated 1st March, 1986 as amended from time to time.
7. Sometime in February, 1992 various search and seizure proceedings were carried out by the Officers of the Central Excise Department at the factory of the petitioner at Taratala Road and Beliaghata Road. Ultimately, on 3rd March, 1992 a notice to show cause was issued to the petitioner from the Office of the Assistant Collector of Central Excise.
8. Mr. Mullick on behalf of the petitioner has contended that no case at all been made out in the show cause notice and, therefore, it should be quashed even at this stage.
9. The main charge in the show cause notice is that M/s. ESBI Transmissions Pvt. Ltd., 8, Camac Street, Calcutta-17 have established themselves as designers and manufacturers in India for producing “VULCAN” diaphragm couplings (flexible) with their own designs and rights for supplying the said couplings in this country in the industrial application field. In this context, the said foreign company have not objected against the use of their Trade name mark “VULCAN” on these diaphragm couplings (flexible) manufactured indigenously and cleared by the assessee, so much so that the said company ‘VULCAN’ has been got registered by M/s. ESBI Transmissions Pvt. Ltd., 8, Camac Street, Calcutta-700017, under the Trade & Merchandise Marks Act, 1958 (43 of 1958) and the use of the name ‘VULCAN’/VULCAN-type couplings’, by virtue of an assignment and thus, the exclusive right to manufacture, sell offer for sale, supply and/or distribution of VULCAN/VUL-CAN-type couplings and spares by any other firm in India other than the assessee, is illegal. In this connection it is stated that ‘M/s. VULCAN COUPLINGS’ are established designers and manufacturers in Germany for ‘VULCAN COUPLINGS’ and selling the same all over the World especially in the Marine applications field. Now Para 7, the Notification No. 175/86-C.E., dated 1-3-1986, as amended states, inter alia, the exemption contained in this notification shall not apply to the specified goods with a brand name or trade name (registered or not) or another person who is not eligible for the grant of exemption under this notification. Since ‘VULCAN COUPLINGS’ of Germany are not entitled to SSI benefits by virtue of being a foreign company, hence the benefit of Notification No. 175/86-C.E. would not be available to M/s. ESBI Transmissions Pvt. Ltd., in respect of the diaphragm couplings (flexible) in question affixed with the brand/Trade name ‘VULCAN’ of a foreign manufacturers and hence the said goods attract full effective rate of duty at 20% ad valorem (Basic) Plus 10% special on basic.
10. There is no dispute that the petitioner had availed of the benefit of the Notification No. 175/86-C.E., dated 1-3-1986 as amended from time to time by virtue of the fact that the petitioner is a small scale unit. It was allowed the benefit of the exemption given in that notification. The case of the respondents is that the petitioner is not entitled to this exemption, because Clause 7 of the Notification provides :-
“7. The exemption contained in this 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 the grant of exemption under this notification.”
11. It has been contended on behalf of the respondents that the said foreign company has not objected to the use of their Trade name mark ‘Vulcan’ which has been registered by M/s. ESBI Transmissions Pvt. Ltd., 9, Camac Street, Calcutta-17 under the Trade & Merchandise Marks Act, 1958 (43 of 1958). The use of the name ‘VULCAN /VULCAN-type couplings and spares’ by any other firm in India other than the assessee has become illegal. In this connection it is stated that M/s. Vulcan Couplings are established designers and manufacturers in Germany for ‘Vulcan Couplings’ and are selling the same all over the World, especially in the Marine applications field. Now Para 7 of the Notification No. 175/86-C.E., dated 1-3-1986, as amended states, inter alia, that the exemption contained in this notification shall not apply to the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification. Since ‘Vulcan Couplings’ of Germany are not entitled to SSI benefits by virtue of being a foreign company, hence the benefit of Notification No. 175/86-C.E. would not available to M/s. ESBI Transmissions Pvt. Ltd., in respect of the diaphragm couplings (flexible) in question affixed with the brand /Trade name ‘Vulcan’ of a foreign manufacturer and hence the said goods attract full effective rate of duty at 20% ad valorem (Basic) plus 10% special on basic (now 15%),
12. It appears that the respondents have, issued the show cause notice on the basis of a wrong assumption of law and fact. The exemption under the aforesaid notification could be taken away only if it is found that the petitioner as a manufacturer had affixed the specified goods with a brand name or trade name (registered or not) of another person who was not eligible for the grant of exemption under the aforesaid notification. It has been rightly contended on behalf of the petitioner that the petitioner has used a brand name of its own and of which it is the registered owner. In such a situation the provisions of Clause 7 of the aforesaid notification will not apply to the case of the petitioner.
13. In my judgment the contention made on behalf of the petitioner must be upheld.
14. The petitioner is the owner of the registered trade mark “Vulcan”. By virtue of the provisions of Section 28 of the Trade & Merchandise Act the petitioner has acquired an exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered. The petitioner is entitled to obtain relief against any person in respect of infringement of the trade mark in the manner provided by the Trade & Merchandise Marks Act. Therefore, no other person apart from the petitioner is entitled to use this trade mark. There is no question of there being any other person having any right to the trade mark in respect of these products. In view of this position in law it is not open to the respondents to contend that the petitioner was using the brand name or trade name registered or otherwise of some other person. The petitioner was using its own registered brand name or trade name “Vulcan.” By virtue of the provisions of Section 28 of the Trade & Merchandise Marks Act, 1958 the petitioner acquired the exclusive right to use the trade name “Vulcan”. Therefore, no other manufacturers including the German firm could use the trade name “Vulcan” in India without the consent of the petitioner. It is not the case of the respondents that apart from the petitioner any other person is manufacturing and selling these products under the trade name “Vulcan” in India. But the allegation is that there is a German firm which also uses the trade mark “Vulcan”. The petitioner has not denied this allegation. In fact, the petitioner admits that it has been authorised by the German firm to use the trade mark “Vulcan” in India. The petitioner has been permitted to use this trade mark as an owner thereof. He has applied and obtained registration of this trade mark in his own name. So far as India is concerned the trade mark belongs to the petitioner. The Central Excise Act is applicable throughout the territory of India only. The petitioner is using its own trade mark in India and not of somebody else. Therefore, the allegation that the petitioner is using somebody else’s trade mark militates against the provisions of the Trade & Merchandise Act, 1958 which are applicable throughout the territory of India.
15. In that view of the matter this writ petition must succeed.
16. The show cause notices dated 3rd March, 1992 and the letter dated 9th March, 1992, written pursuant to the said show cause notice, are quashed.
17. A prayer has been made on behalf of the Department for stay of operation of this order. The prayer is refused.
18. The writ petition is disposed of finally, as above.
19. All parties shall act on the signed copy of the minutes of operative part of this judgment on usual undertaking.