2018 (8) TMI 1072 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – 2018 (15) G. S. T. L. 742 (App. A. A. R. – GST) – Branding of goods – Whether mention of name of the Appellant on the goods, as required by FSSAI regulations and Legal Metrology Rules, amounts to brand name or not? – Whether use of general words like ‘Choice’, ‘Value’ or ‘Superior’ on the goods to be sold in ‘More stores would render the said goods as branded or not? – N/N. 02/2017-Central Tax (Rate) dt. 28 June 2017.
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Held that:- The practice of branding is thought to have begun with the ancient Egyptians who were known to have engaged in livestock branding as early as 2700 BCE. Branding was used to differentiate one person’s cattle from another’s by means of a distinctive symbol burned into the animal’s skin with a hot branding iron. If a person stole any of the cattle, anyone else who saw the symbol could deduce the actual owner. Over time, the practice of branding objects extended to a broader range of p
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g a connection in the course of trade between such specified goods and the person using such name. So, the real test here is the connection between the specified goods on which such a name is being used and the person using such name in the course of trade.
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In the instant case, the goods in question are being sold under the brand ‘More’ in exclusive ‘More Stores’ and also bearing the registered logo of ‘Aditya Birla Retail’. Therefore, there are two brand names attached to the said goods at present. Alternatively, the consumers identify these goods by ‘More’ brands and also as those manufactured by Aditya Birla Group company – There is one more logo on the goods which bears ‘Aditya Birla Retail’, the registered trade mark of the Group company, used by the Appellant under licence agreement. Thus the goods are being identified by consumers/customers by names ‘More’ and ‘Aditya Birla Retail’. As confirmed by the Appellant, huge investment and time is involved in establishing the bra
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roduct can result in consideration of brand or not – in the instant case that the answer is in affirmative.
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It is clear that even by removing their brand names ‘More’ and ‘Aditya Birla Retail’ from packaging of the said goods, the Appellant still enjoys the advantage attached to the said two brand names and thus the benefit of exemption cannot be extended to them. The mention of name ‘Aditya Birla Retail Limited’ on the packages, as manufacturer of the said goods clearly indicates the connection between the said goods and Aditya Birla Group in the course of trade as they are already having a registered brand in the name of ‘Aditya Birla Retail’ which was being displayed on the said goods till now – there is direct connection between the said goods and the brand ‘More’ and the manufacturer Aditya Birla Retail Ltd., thus the use of name of manufacturer on packages can be considered as brand name.
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Merely by removing their registered brand name logos viz. ‘MORE’ and ‘Aditya Bir
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ct, 2017) At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act. The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by M/s Aditya Birla Retail Limited (herein after referred to as the Appellant ) against the Advance Ruling No. GST-ARA-13/2017/B dtd.23.03.2018. BRIEF FACTS OF THE CASE A. Aditya Birla Retail Limited ( the Appellant ) is inter alia engaged in the processing and/or trading of a wide range of cereals, pulses and flour classifiable under Chapter 10 of the First schedule to the Customs Tariff Act, 1975 ( subject goods ). The subject goods are sold by the
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es, several categories of products, manufactured by different companies, are also sold. Such products may or may not be bearing a brand name. C. The subject goods are either processed and packed in-house by the Appellant (Stream 1) or are procured in processed and packed form from third party vendors (Stream 2). The modus operandi followed by the Appellant in respect of the said transaction streams, and, the nature of details disclosed on the packaging of the subject goods under such streams is as follows: (i) Stream 1- Subject goods processed and packed in-house by the Appellant: The Appellant procures unprocessed food products from various vendors and undertakes processing and packing in its own units. Such processing would generally involve sorting, quality assessment, grading etc. The subject goods would thereafter be sold by the Appellant from its More Stores. The package of subject goods sold by the Appellant under Stream 1 inter alia bears the name of the Appellant as being the
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d by the Appellant in different quality variants, determined based on various parameters including the quality or size of grains or seeds, nature of processing undertaken, nutritional content, sourcing, etc. It therefore becomes essential for the Appellant to have appropriate disclosures on the package of such subject goods so as to enable the customers to identify and buy products based on their requirements, budget and preferences. Therefore, in respect of such subject goods, under both streams, the package also bears a declaration which acts as a quality indicator (e.g. whether the product is of standard quality, premium quality or superior quality). D. In the State of Maharashtra, the Appellant sells the subject goods under Stream 1 and Stream 2 from around twenty five More Stores located across the State. As regards the subject goods under Stream 1, the same are either processed at its processing unit located in Pune or are sourced from processing units located in other States. As
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ct goods under either streams, is presently discharging GST at the rate of 5%. F. It is relevant to note that the requirements to (a) have specific declaration on the package of the subject goods, as regards its manufacturer, and, (b) to provide contact details in relation to consumer complaints (customer care related details), are statutory requirement in terms of the Legal Metrology Act, 2009 read with the Legal Metrology (Packaged Commodity) Rules, 2011, and, the Food Safety and Standards Act, 2006 read with Food Safety and Standards (Packaging and Labelling) Regulations, 2011, the relevant extracts of which legislations [collectively referred to as Subject Statutory Provisions ] are provided below- Legal Metrology Act, 2009 'Section 18. Declarations on pre-packaged commodities.-(1) No person shall manufacture, pack, sell, import, distribute, deliver, offer, expose or possess for sale any pre-packaged commodity unless such package is in such standard quantities or number and bea
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belling of foods. (1) No person shall manufacture, distribute, sell or expose for sale or dispatch or deliver to any agent or broker for the purpose of sale, any packaaed food products which are not marked and labelled in the manner as may be specified by reaulations.. Food Safety and Standards (Packaging and Labelling) Regulations, 2011 'CHAPTER-2- Packaging and Labelling 6. Name and complete address of the manufacturer- (i) The name and complete address of the manufacturer and the manufacturing unit if these are located at different places and in case the manufacturer is not the packer or bottler, the name and complete address of the packing or bottling unit as the case may be shall be declared on every package of food…' G. The Appellant intends to revise the packaging of the subject goods and the manner in which the subject goods are put up for sale, to exclude from the packages the registered trademarks, namely More trademarks and the Aditya Birla logo. The proposed packa
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ng statement that the said term is merely a quality indicator and that it indicates that the product is of a standard quality; – The term Choice with a corresponding statement that the said term is merely a quality indicator and that it indicates that the product is of a premium quality. – The term Superior with a corresponding statement that the said term is merely a quality indicator and that it indicates that the product is of a superior quality. H. Vide Application dated 26th December 2017 filed with the Advance Ruling Authority ( ARA ), the Appellant sought an advance ruling on the following questions qua the applicability of GST exemption in terms of certain Notifications, in respect of the subject goods intended to be sold by the Appellant under the proposed packaging- Question 1- Whether the subject goods, proposed to be sold under Stream 1, where the package of the subject goods would merely have a declaration mentioning the name and registered address of the Applicant as the
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nt entries to the Exemption Notifications? Question 3- Whether the declarations made on the package, by inter alia using common/generic terms viz. Value , Choice and Superior , for the sole purpose of indicating the quality of the product so as to enable the customers to identify and buy products based on their requirements, budget and preferences can be construed to be a brand name for the purpose of the Exemption Notifications? I. Vide its Order dated 23rd March 2018 ( Impugned Order ), issued under Section 98 of the Central Goods and Service tax Act, 2017 ( CGST Act ) and Maharashtra Goods and Service tax Act, 2017 ( MGST Act ), the ARA has, basis the findings recorded in the Impugned Order, answered Question 1 and Question 2 in the negative. As regards Question 3, the ARA has not specifically dealt with the same on the premise that the question cannot be raised in isolation . J. Aggrieved by the Impugned Order, the Appellant has filed the present Appeal. Whereas, the ARA has in ter
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.L.T. 123 (S.C.)] is totally misplaced as the relevant facts and the issue involved therein are distinguishable from Appellant s case and accordingly the said decision is inapplicable. (c) That the Impugned Order erroneously holds that availability of the subject goods only at More Stores would render the subject goods branded. On a plain reading of the Exemption Notifications, it is abundantly clear that as per the scheme of relevant provisions, the condition to be examined is whether the unit container of the subject goods bears the brand name. Accordingly, the reliance placed on the decision of the Hon ble Supreme Court in the case of the CCE v. Australian Foods India (P) Ltd. [(2013) 12 SCC 468],[(2014) 1 SCC (Civ) 701] is totally misplaced as the facts therein are distinguishable from Appellant s case and therefore the said decision is inapplicable. (d) That the declarations made on the proposed package by inter alia using common/generic terms viz. Value , Choice and Superior , fo
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ing a brand name on which an actionable claim or an enforceable right in the court of law is available, other than those where any actionable claim or any enforceable right in respect of such brand name has been voluntarily foregone, [subject to the conditions as set out in the Annexure to the CGST Notification]. The relevant part of the CGST Notification No .2/2017-Cenfro/Tax (Rate) dated 28th June, 2017 is extracted below: G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Schedule appended to this notification, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column of the said Sch
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hrase brand name means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or 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. (b) The phrase registered brand name means,- (A) a brand registered as on the 15th May 2017 under the Trade Marks Act, 1999. irrespective of whether or not the brand is subsequently deregistered; (B) a brand registered as on the 15th May2017 under the Copyright Act, 1957(14 of 1957; (C) a brand registered as on the 15th May2017 under any law for the time being in force in any other country. The range of cereals, pulses, etc. (subject goods), being supplied by the Appellant are covered under the various headings/sub-headings of Chapter 10 to the First Schedule to the Cus
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he person, with or without indicating the identity of such person. In other words, the use of the name should be to associate specified goods with the person, in a manner that the customer would identify the specified goods with that person. Mere mention of the name of the manufacturer would not constitute a brand name as the customer would obviously not identify the goods with the name of the manufacturer. Reliance in this regard is placed on the following decisions: i. Astra Pharmaceuticals (P) Ltd. v. Collector of C. Ex, Chandigarh [1995 (75) E.L.T. 214 (S.C.)]- The 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 Dextrose injections would have described it as Astra injections or Astra Dextrose injections then it could be said that a relationship between the monograph and the medicine was established. In the case of
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al trade marks in respect of his goods(known as Product mark), besides using a common mark in all his products to indicate the origin of the goods from the enterprise (known as House mark). This practice is more predominant in the pharmaceutical trade. Though both are trademarks and are registrable as such, each has its own distinct function. While the House marker presents the image of the enterprise from which the goods emanate, the Product mark is the means by which goods are identified and purchased in the market place and it the focal point of presentation and advertisement. iii. Tarai Foods Limited v. CCEx. Meerut-II 2006 [(198) E.L.T. 323 (S.C.)]- Furthermore the definition of the words brand name shows that it has to be a name or a mark or a monogram etc. which is used in relation to a particular product and which establishes a connection between the product and the person. This name or mark etc. cannot, therefore, be the identity of a person itself. It has to be something else
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ection in the course of trade between the subject goods and the Appellant. The definition itself indicates that brand name is one which establishes the said connection with or without indicating identity of such person. Therefore, in the present case, where the product packaging, though having the Appellant s name, will not have the brand name of the Appellant (i.e. More trademarks), it cannot be construed to be branded. 7. Further, the Impugned order, by referring to the Appellant s website and by stating that the Appellant 7s a big brand name in the business world, world over and that Aditya Birla is a benchmark in itself and is associated with a certain trust and quality , has erroneously proceeded to conclude that the Appellant s name, which is to be reflected on the proposed packaging, is more than sufficient to establish an identity with the goods. On this basis it has been erroneously held that the name of the Appellant would constitute a brand name. In this regard, it is releva
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pany. An illustrative list in this regard is provided. As evident, this strictly holds true in case where the product is eponymous to the manufacturer, which is not the case of the Appellant. a. In this regard, the reliance placed on the decision of the Hon ble Supreme Court in the case of the Commissioner of Central Excise, Trichy vs Grasim Industries Ltd [2005 (183) E.L.T. 123 (S.C.)] is totally misplaced as the facts therein are distinguishable from Appellant s case and accordingly the said decision is inapplicable. The Impugned Order therefore erroneously places reliance on the said decision to hold that the name of a company would constitute a brand name. The issue involved in the present case i.e. whether mentioning of the name of the manufacturer on the package of a product, in terms of statutory requirements, would constitute a brand name , was not before the Hon ble Supreme Court in the case of Grasim (supra). In Grasim (supra), the Hon ble Court was concerned with whether use
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222, Haryana Financial Corpn. v. Jagdamba Oil Mills (2002) 3 SCC 496 and Nalini Mahajan (Dr.) v. Director of Income Tax (Investigation) (2002) 257 ITR 123 (Del).] Armaendra Pratap Singh v. Tej Balendar Prajapati – 2004 (10) SCC 65- A judicial decision is an authority for what it actually decides and not for what can be read into it by implication or by assigning an assumed intention to the judges 9. Further, the Impugned Order places a misconstrued reliance on the definition of the term trade description under the Trade Marks Act, to support the contention that identity of the manufacturer/person qualifies as a brand name/trade description. Without prejudice to the fact that the said reference does not form a substantive basis of the findings made in the Impugned Order, it is submitted that the said reference is extraneous to the terms of the Exemption Notifications as the definition of the term brand name therein neither includes a trade description nor does it borrow its meaning fro
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only if it uses on the goods in respect of which exemption is sought, the same/similar brand name with the intention of indicating a connection with the assessees goods and such other person or uses the name in such a manner that it would indicate such connection. If there is no such intention or that the user of the brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, it would be entitled to the benefit of exemption . 11. Applying the said principle to the Appellant s case, it cannot be said that the disclosure of Appellant s name on the proposed packaging, in terms of a statutory prescription, tantamount to an intention of indicating a connection between the subject goods and the Appellant. Such a conclusion is further flawed when viewed in the context that reflection of its name equally coincides with withdrawal of the corresponding brand names i.e. More trademarks , with which the subject goods have been historically ident
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plicant also has a family of customers purchasing from the More Stores and associating the brand with some quality standards , and, that the customers are aware of the More brand as well as the products of the More brand which are available in the More Stores alongwith products of other manufacturers , it erroneously and without any basis presumes that such a connection would not be broken, if the disclosures pertaining to the More Trademarks are withdrawn from its packaging. 12. The Impugned Order erroneously observes that the proposed packaging would be using a combination of colors from the logo of Aditya Birla Group . The said findings are categorically denied as there is no intention on part of the Appellant to indicate, through a color combination, any connection between the subject goods and the Aditya Birla logo. Further, the manner of usage of such colors on the proposed package do not in any manner exert recall with regard to the Aditya Birla logo. In fact, in certain cases,
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nt case was squarely covered by the decision of Hon ble Supreme Court in Tarai Foods Limited v. CCEx. Meerut-II 2006 (198) E.L.T. 323 (S.C). Although the Appellant had relied upon the said decision of the Hon ble Supreme Court and also the decision of Hon ble Tribunal in the case of Synotex Industries (supra) on this issue, the ARA has not even dealt with the said decisions. The issue as to whether mentioning of the name of the manufacturer on the package of a product, in terms of statutory requirements, would constitute a brand name , is answered by the following decisions/circulars, which though relied upon by the Appellant before the ARA, were not considered, thereby rendering the Impugned findings unsustainable : (i) In case of Tarai Foods Limited Vs CCEx. Meerut-II 2006 (198) E.LT. 323 (S.C), the Hon ble Supreme Court has inter alia examined whether the definition of brand name , would include the name of the manufacturer printed on the package in terms of a legal requirement. The
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re of vegetable preparation i.e. French Fries and Frozen foods. They had been using two types of packaging for the sale of their product. First packing carried the name Inland Valley along with other details, i.e. the name and registered address of the manufacturer, while the second packing bore all other details except the words Inland Valley . They classified their first packing under sub-heading No. 2001.10 and cleared the same from the factory by paying duty at the rate of 8% as prescribed in that sub-heading. But the second packing had been classified by them under sub-heading 2001.90 and cleared at nil rate of duty – The definition of brand name considered in this case was similar to the definition as stated in the Exemption Notifications. – The department had contended that the definition of brand name would include the name of the manufacturer which was printed on the products. – In the above context, the Hon ble Supreme Court on the issue as to whether the name of the manufact
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which establishes the link. 16. There is a value attached to the brand name, a value which has been recognized in the tariff entry by providing for levy of excise duty on goods bearing a brand name. It may be that the appellant had deliberately omitted the brand name in selling the French Fries to ovgil of the nil rate of tariff. This cannot detract from the consequences which would follow in law. If the assessee opts not to take advantage of the brand name in its trade, it could at least have the benefit of the rate of duty applicable to unbranded product. (i). In the case of Commissioner of Central Excise v. Synotex Industries 2012 (278) ELT 90 (Tri-Kolkata) the Hon ble Tribunal has inter alia examined whether the definition of brand name , would include the name of the manufacturer printed on the package in terms of a legal requirement and held as follows- If the Revenue s plea that indicating the manufacturer s name would amount to affixing brand name is accepted, then all the goo
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(Tri. – Del.)], stating that mere printing of the name of the company on unit container does not make the package branded, unless the brand itself is printed specifically. 17. It is well settled that in terms of Article 141 of the Constitution of India, the law laid down by the Hon ble Supreme Court is binding on all the Courts and authorities in the country. Accordingly, in terms of the above decisions of the Hon ble Supreme Court, mere mention of the name and address of the manufacturer as per the requirement under the Subject Statutory Provisions, without actually printing the brand on the product packaging, would not render the product as bearing a brand name . 18. Reliance is further placed on the decision of the Hon ble Madras High Court in the case of CCE v. CESTAT Chennai, [2015 (318) ELT 238 (Mad)], wherein the issue pertained to denial of SSI exemption on account of the assessee clearing manufactured goods using the superscription manufactured and packed by SVS & Sons , w
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or made ups and become liable to excise duty. Needless to say, deemed manufacture and liability to excise duty will arise only if such retailer affixes a brand name on the readymade garments and affixes a label bearing the RSP on the packages containing the readymade garments of ₹ 1000 or above. (b) Circular No.947/8/2011-CV dated 21st June 2011, which was issued as regards levy of Excise duty on branded readymade garments, (where the definition of brand name was similar to the definition applicable in the present case), it was clarified therein that the mere mention of the name of the tailor or manufacturer would not render the product as branded product. 20. In view of the above, the findings of the Impugned Order that mere mention of the name of the manufacturer and/or packer, which is a statutory requirement, onto the packaging of subject goods, would render the product branded, is erroneous and unsustainable. Construing the name of the manufacturer as a brand name would rend
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by regulations . Rule 6 of the Food Safety and Standards (Packaging and Labelling) Regulations, 2011 ( FSS Regulations ) in turn mandates provision of details of the manufacturer of the product on the corresponding package. Therefore, in case it is construed that name of the manufacturer is a brand name in itself, then every food product which is sold in packed form would be considered as branded. To this extent, the requirement that the product should bear a brand name would be rendered redundant, considering that a product sold in a unit container (and therefore being governed by FSSA and FSSA Regulations) would necessarily disclose the name of the manufacturer in every case. 23. It is a settled law that the courts should always presume that the legislature inserted every part in a statute/notification for a purpose and the legislature s intention is that every part of a statute should have effect and that a construction which results in redundancy of some part of a statute, must no
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ngly holds that since the subject goods are sold exclusively from More Stores, the same would be construed to be branded. In this regard, reliance has been erroneously placed on the decision of the Hon ble Supreme Court in the case of CCE v. Australian Foods India (P) Ltd [(2013) 12 SCC 468] which decision has been passed in the context of a different notification and would not be relevant in the facts of the present case for detailed reasons set out below. b. The facts before the Hon ble Supreme Court, in the Australian Foods case (supra), were entirely different from the facts in the Appellant s case. In the said case, the assessee was engaged in the manufacture and sale of cookies from branded retail outlets of Cookie Man and the said cookies were sold from a dedicated outlet of Cookie Man where no other products but those of the assessee were sold . The assessee in the said case was discharging Central excise duty on cookies sold in plastic pouches/containers on which brand name wa
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rade between such Specified goods and some person using the mark . On this basis, it was held that cookies sold loosely from the Cookie Man counter would be considered to be branded. c. On perusal of the SSI Exemption Notification it is evident that the same was applicable to all genres of goods and the benefit thereunder was restricted in respect of goods bearing a brand name or trade name . It is noteworthy that apart from having a universal applicability, the SSI Exemption Notification did not also prescribe the manner in which the goods may bear a brand name (i.e. on a unit container etc.). It is in this context that the Hon ble Supreme Court held that to determine whether a product bears a brand name, one needs to look into the environment i.e. packaging and wrapping of the goods, accessories it is served with, uniform of vendors, invoices, menu cards, hoardings and display boards of outlet, furniture and props used, the specific outlet itself in its entirety and other such factor
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on explicitly correlates the exemption thereunder with the corresponding disclosures made on the unit container, which is not dependent on the manner and environment in which the goods are sold. In this regard, the relevant extract of the Annexure to the CGST Notification is reproduced below- ANNEXURE I For foregoing an actionable claim or enforceable right on a brand name, (a) the person undertaking packing of such goods in unit containers which bears a brand name shall file an affidavit to that effect with the jurisdictional commissioner of Central tax that he is voluntarily foregoing his actionable claim or enforceable right on such brand name as defined in Explanation (ii)(a), and (b) the person undertaking packing of such goods in unit containers which bear a brand name shall, on each such unit containers, clearly print in indelible ink, both in English and the local language, that in respect of the brand name as defined in Explanation (ii)(a) printed on the unit containers he has
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hird party brands, wherever applicable. Further, even in respect of the subject goods, the Appellant offers similar products of other companies alongside its own products. This specifically stems from the overall objective to project and promote More Stores as multi-brand retail outlets which offer wide range and variety of products of several brands/manufacturers. In fact, during FY 2017-18, out of the total sales generated by the Appellant from More Stores across India, around 70% of the revenue pertained to sales from third party products. Evidently, the aforesaid facts can be clearly contrasted with the facts in the case of Australian Foods (supra). On this basis also, it can be contended that the said ruling cannot be applied to the facts of the present case. f. Since, in the said case, the Hon ble Supreme Court was concerned with the an interpretation specific and peculiar to the SSI Exemption Notification, the Hon ble Court, in its wisdom, rightfully cautioned that our observati
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and preferences. Such declarations made on the package by inter alia using common/generic words viz. Value , Choice and Superior are only aimed at creating a clearly identifiable distinction between different quality versions of the same product. Considering that the said terms would therefore not indicate any connection in the course of trade between the Appellant and the products, but would only reflect its quality versions, the same would not qualify as a brand name . b. In this regard, it is also relevant to refer to Section 9 of the Trade Marks Act, which lays down the absolute grounds of refusal of registration of a name or mark or a logo, as a trademark under the said Act. Section 9(l)(b) states that a trade mark which consist exclusively of marks or indications which may serve in trade to designate the kind, quality, quantity, intended purpose, values, geographical origin or the time of production of the goods or rendering of the service or other characteristics of the goods o
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s and analysis thereof, it can be concluded that the subject goods proposed to be sold under Stream 1, can be considered to be not bearing a brand name and would accordingly be eligible for exemption from GST in terms of relevant entries to the Exemption Notifications. PERSONAL HEARING 26. Hearing in the matter was fixed on 18.07.2018 which was attended by Sh. Anay Banhatti and Sh. Supreme Kothari, both Advocates for the Appellant and Sh. S.S. Bhide, Superintendent, Div.-V, CGST, Mumbai East, as jurisdictional officer. The Advocates reiterated their written submissions and further submitted a compilation of relevant documents/legislations/cases. They stressed upon the argument that mentioning name of manufacturer on the packages, which is statutory requirement, does not result in a brand name on the package. They read out relevant portions of the judgments relied upon by them in support of their claim and also the judgments relied upon by the AAR to distinguish the same from their matt
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f M/s Grasim, even name can be treated as brand name. Also, the Appellant never brought on records the facts about their link with the products. He further stated that the branding concept keeps on changing and it cannot be decided based on the past records of the Appellant. He stated that intentions of the Appellant are not free from doubt as they had earlier proposed for the goods being marketed by them (2nd question before AAR) and now withdrew the same as their claim of declaring the details on packages as per statutory requirements was not found valid by AAR. Written submissions were also tendered to fortify their say. Discussions 28. We have heard both the parties and gone through the written submissions made in the matter. Of the three points raised before the AAR, the Appellant is raising only points no. 1 and 3, thereby dropping the issue of products proposed to be sold under stream 2 i.e. where the goods of third parties were proposed to be marketed by the Appellant. Therefor
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uently amended by Notfn. No. 28/2017 -Central (Rate) dt. 22nd Sept. 2017, resulting in exclusion of the said goods from the exemption available under the said notification if the same are put up in a unit container and- (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where act actionable claim or enforceable right in respect of such brand has been foregone voluntarily, subject to the conditions as in the Annexure I]. It is seen therefore that the said exemption is targeted for reduction in prices of unbranded goods for the purpose of exemption from GST, since branded goods carry value addition which is intended to be taxed. 30. In this context, let us look into the issue of what is a brand and whether the impugned goods can be termed as branded as per the proposed packaging strategy of the appellants. The practice of branding is thought to have begun with the ancient Egyp
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ation methods that help to distinguish a company or products from competitors, aiming to create a lasting impression in the minds of customers. The key components that form a brand s toolbox include a brand s identity, brand communication (such as by logos and trademarks), brand awareness, brand loyalty, and various branding (brand management) strategies. Many companies believe that there is often little to differentiate between several types of products in the 21st century, and therefore branding is one of a few remaining forms of product differentiation. 31. Coming to how brand name is defined under the said GST notification, we find that the definition of brand name therein includes any name, which may be name of the manufacturer as well, which may be seen as under- The phrase brand name means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the pur
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Group company. The Appellant has admitted that, the Appellant has over the course of period made concentrated efforts and incurred costs, which inter alia include significant efforts by way of advertising and marketing, to publicize and establish the More brand. It is consequent to such efforts that the customers of the subject goods recognize the brand and identity and ask for the products of the said brand. Customers of the subject goods who enter the More stores to purchase the subject goods, associate the subject goods with the More brand name, and, do not necessarily associate/connect the subject goods with the name of the Appellant (Para 16 above). There is one more logo on the goods which bears Aditya Birla Retail , the registered trade mark of the Group company, used by the Appellant under licence agreement. Thus the goods are being identified by consumers/customers by names More and Aditya Birla Retail . As confirmed by the Appellant, huge investment and time is involved in es
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detract from the consequences which would follow in law. If the assessee opts not to take advantage of the brand name in its trade, it could at least have the benefit of the rate of duty applicable to unbranded product. The exemption claimed in both the cases is similar but facts are different. Hon ble Apex Court has ruled that if the assessee opts not to take advantage of the brand name in its trade, it could at least have the benefit of the rate of duty applicable to unbranded product. 34. So the question that begs an answer is whether the Appellant is opting not to take advantage of brand names More and Aditya Birla Retail ? Looking into the circumstances and environment surrounding the proposed sale of such goods, it is our view that the answer has to be in the negative, as we shall now proceed to explain. The Appellant has proposed to remove the two trade marks from the present packing of the goods, maintaining the environment of the sale of goods intact, that is to say that the
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other words in the lexicon as well for indicating quality viz. Standard , Better or Rich etc. So they have chosen to continue the use of these words because they are already being used with the brand More , as can be seen from the photo of the present packing submitted by the Appellant as Exhibit of their Appeal which reads as MORE CHOICE and VALUE . So the words proposed to be retained on new packing and prominently displayed on it are already associated with the brand More and registered in the minds of the customers who can identify the said goods by these words. 35. Additionally, it is also proposed to continue to the brand name Aditya Birla Retail , but without the Group Company Logo, on the package in the form of manufacturer s name. By mentioning the manufacturer s name on the packages, albeit as per statutory requirements, the Appellant is taking advantage of their registered brand, the logo of which they have opted to remove from the said goods. The Appellant has argued that
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result in consideration of that product as branded. But if the name of manufacturer mentioned on the product, even as per statutory requirements, clearly establishes a link with the manufacturer and the product, then it surely amounts to be a brand name, as brand name includes any name as per explanation provided under the exemption notification. Though there is no laid down criterion in this regard, but the surrounding environment needs to be scrutinized as to whether the name of manufacturer on the product can result in consideration of brand or not, and we have seen in the instant case that the answer is in affirmative. 36. Thus, it is clear that even by removing their brand names More and Aditya Birla Retail from packaging of the said goods, the Appellant still enjoys the advantage attached to the said two brand names and thus the benefit of exemption cannot be extended to them. The mention of name Aditya Birla Retail Limited on the packages, as manufacturer of the said goods clea
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d the brand More and the manufacturer Aditya Birla Retail Ltd., thus the use of name of manufacturer on packages can be considered as brand name. 37. Two Court rulings are relied upon to substantiate our say: (a) Hon ble Supreme Court s order in the case of Australian Foods India(P) Ltd., [2013 (287) ELT 385 (SC] has specifically mentioned that a scrutiny of the surrounding circumstances is not only permissible but necessary to decipher the same. Hon ble Court has ruled in this case that physical manifestation of brand name on goods is not a compulsory requirement. The scrutiny of surrounding circumstances, as done in above paras, clearly shows that the said goods, even though without affixing brand on them, will be considered as bearing the brand of More . The bearing a brand as mentioned in the said notification and vehemently argued by the Appellant, does not necessarily mean affixing on the unit container/goods. The notification does not provide specifically about the affixing the
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of Apex Court in the matter of Tarai Foods Ltd.: (a) In case of judgment given by Kolkata Tribunal in the matter of M/s Synotex lndustries,[2012 (278) ELT 90(Tri. Kolkata)], we observe that the facts of the case are different from the instant case as we have discussed above that inspite of the mention of manufacturer name on packages, the goods are branded in light of the surrounding circumstances and the Appellant has not foregone the advantage of brand More though they have proposed to remove the logo of said brands from the packages. (b) The judgment of Hon ble Supreme Court in the matter of M/s Pepsi Foods Ltd.[2015 (322)E.LT. A325(S.C.)], was based on the judgment of Tarai Foods Ltd., which we have already discussed. The facts and circumstances of the case of M/s Nirula and Company Pvt. Ltd. [2005 (186) ELT 412(Tri. Delhi)] are same as of Tarai Foods and Pepsi Foods and hence distinguishable. (c) In the case of West Bengal Chemical Industries Ltd. [2006 (200) ELT 68 (Tri. Kolkata
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281 ( Tri- Delhi)], the issue pertained to the distinction between House Mark and Trade Mark . (i) Commissioner of Central Excise, Pudducherry, [2015(318)ELT 238(Mad.)]-The issue does not state anything about the environment kept intact to take advantage of the earlier brand being used on the goods as is being done by the Appellant in the instant case. 39. The other judgments cited by the Appellant pertain to the interpretation of the Statue. Here, the issue of interpretation is the exemption notification and we are strictly following what is prescribed under the said notification regarding the brand name. We are not inclined to extend the benefit of the said exemption notification to the Appellant by liberal construction of the said notification. In this, we are fortified by following judgments of Hon ble Supreme Court- (a) Rajasthan Spg. and Wvg. Mills Ltd. v. Collector of C. Ex. Jaipur[1995(77) ELT 474(SC)] – Exemption notification construable strictly – Liberal construction which
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e goods itself. 41. In view of the above discussions, we hold that merely by removing their registered brand name logos viz. MORE and Aditya Birla Retail from the packaging of some of their products and keeping the surrounding environment intact to take advantage of the said brands not render such goods unbranded and the benefits of exemption notification from GST would not be available to such goods. Also, the use of words like CHOICE , VALUE or SUPERIOR on the proposed packing, which are already in use with the brand More on the present packing, would amount to branding of goods as the goods can be identified with the brand More by the use of these words. Accordingly, we pass the following order: ORDER In respect of point (i) of Prayer to the grounds of Appeal, we do not find any infirmity with the ruling given by Authority for Advance Ruling in this behalf for Question No. 1 posed before them. In respect of point (ii) of Prayer to the grounds of Appeal, we hold that the use or words
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