In Re: Aditya Birla Retail Ltd.,
GST
2018 (8) TMI 1072 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – 2018 (15) G. S. T. L. 742 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – AAAR
Dated:- 7-8-2018
MAH/AAAR/SS-RJ/05/2018-19
GST
SMT. SUNGITA SHARMA AND SHRI RAJIV JALOTA, MEMBER
PROCEEDING
(Under Section 101 of the Central Goods and Service Tax Act, 2017 and the Maharashtra Goods and Service Tax Act, 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 MGS
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Trade Marks Act'). Further, the packaging of the subject goods also bears the 'AdityaBirla' logo which is the registered trademark of Aditya Birla Management Corporation Pvt. Limited, under the Trade Marks Act, which trademark has been licensed to the Appellant for specified purposes. The subject goods are presently sold from its 'More Stores'. The brand name 'More', pertaining to such 'More Stores', is also registered under the Trade Marks Act. However, from the 'More' stores, 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)
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fter procured by the Appellant for being sold from its More Stores.
The package of subject goods sold by the Appellant under Stream 2 inter alia bears the name of the manufacturer, the declaration 'Marketed By-Aditya Birla Retail Limited' and the registered trademarks viz. 'More trademarks' and the 'Aditya Birla' logo. The package also bears a telephone number and an email address, for being contacted in case of consumer complaints.
It is relevant to note that some of the subject goods are sold 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 stream
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8th June 2017 ('CGST Rate Notification'), and, corresponding entries under Schedule 1 to Notification No. 1/2017-lntergrated (Serial no. 46, 48, 50, 51, 53) tax, dated 28th June 2017 ('IGST Rate Notification') and under Schedule 1 to Notification No. 1/2017-State tax, dated 29th June 2017 ('SGST Rate Notification'), the supply of subject goods, when put up in unit containers and inter alia bearing a 'registered brand name', attract GST at the rate of 5%. The Appellant, in respect of supply of the subject 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 Stand
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mentioned on every package' …Explanation III- In respect of packages containing food articles, the provisions of this sub-rule shall not apply, and instead, the requirement of the Food Safety and Standards Act,2006 (34 of 2006) and the rules made there under shall apply
(2) Every package shall bear the name, address, telephone number, email address of the person who can be or the office which can be contacted, in case of consumer complaints.
Food Safety and Standards Act, 2006
'23. Packaging and labelling 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 manufact
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y Provisions, and would have a declaration- 'Marketed by Aditya Birla Retail Limited'.
Under both the streams, for some of the subject goods, the package would also bear a certain declaration for the sole purpose indicating the quality variant of the product so as to enable the customers to identify and buy products based on their requirements, budget and preferences. In this regard, the Appellant intends to make the following indicative declarations on the product package by using common/generic words-
– The term 'Value' with a corresponding 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
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ation') and Notification No.2/2017-State Tax (Rate) dated 29th June 2017) [collectively referred to as 'the Exemption Notifications']?
* Question 2- Whether the subject goods proposed to be sold under Stream 2, where the package of the subject goods would have a declaration mentioning the name and registered address of the manufacturer as per the statutory requirement under the Subject Statutory Provisions as also the declaration 'Marketed by- Aditya Birla Retail Limited' can be considered as 'not bearing a brand name', and, accordingly eligible for exemption in terms of relevant 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
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Foods Limited v. CCEx. Meerut-ll 2006 (198) E.L.T. 323 (S.C.),that the declaration of name of a company as per the statutory requirements would not amount to 'bearing a brand name'. This case is squarely applicable to the facts of the present case. This legal position has also been subsequently followed by the Courts/Tribunals including in the case of Commissioner of Central Excise v. Synotex Industries, [2012 (278) ELT 90 (Tri-Kolkata)].
(b) 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 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 Notificatio
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ithout prejudice to one another.
A. The name of the Appellant does not qualify as “brand name” in respect of the subject goods for the purpose of the Exemption Notifications
3. In terms of the relevant entries of the CGST Notification1, the exemption thereunder would be available to supplies of the subject goods where the following conditions are satisfied:
(a) Where the subject goods fall under the tariff item, sub-heading, heading or Chapter as specified in the column (2) of the CGST Notification, and;
(b) Where the subject goods are other than those (i) put up in unit containers, and (ii) bearing a registered brand name; or bearing 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
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g a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily, subject to the conditions as in the ANNEXURE1]
For the purpose of the exemption notifications, the terms 'unit containers', 'brand name' and 'registered brand name' have been defined to mean as follows:
(i) “unit container” means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a predetermined quantity or number, which is indicated on such package
(ii))(a) 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 purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods
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ation is reproduced above.
4. In terms of the above meaning, a name or a mark would become a 'brand name', for the purpose of the CGST Notification, only when the following conditions are satisfied:
(i) When such name or mark is used in relation to specified goods; and
(ii) When such name or mark is so used for the purpose of indicating a connection in the course of trade between such specified goods and the person using the name or mark, with or without any indication of the identity of that person.
5. In this regard, it is submitted that for any name to qualify as a brand name, it must be used in relation to specified goods indicating a connection in the course of trade between the said goods and the 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 m
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and “Product mark” or “Brand name” has been clearly brought out by way of reference to the decision in Astra Pharmaceutical Pvt. Ltd.(supra). It is stated therein that “House mark” is used on all the products of the manufacturer and that it is usually a device or a form of emblem of words or both. It was also pointed out that for each product a separate mark known as a “Product mark” or “Brand name” is used which is invariably a word or combination of word and letter or numeral by which the product is identified and asked for….In the book of “Law of Trade Marks” by K.C Kailasam and Ramu Vedaraman the distinction between 'Product mark' and 'House mark' has been beautifully delineated, which is as under :”It is possible that the proprietor may use several 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 pharma
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lar products, manufactured by different companies, are also sold, which products may or may not be bearing a brand name. 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. Accordingly, it is the 'More' trademarks which establishes a connection 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 su
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s of the subject goods associate the subject goods with the 'More' brand name, and do not necessarily associate/connect the goods with the name of the Appellant. It is the 'More' trademarks which establishes a connection in the course of trade between the subject goods and the Appellant.
8. The ARA ought to have appreciated that there are several practical illustrations which would establish that a product is recognised in the market through its brand name and may not be directly associated or identified with the name of the manufacturer/brand owner even where such manufacturer/brand owner is a reputed company. The products are associated with the brand and not with the name of the company. Further, there would also be such illustrations where the product is identified with the name of the company. 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.
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deal with the question as to whether the name of the manufacturer which is declared as per the statutory requirement can be construed to be a brand name. It is a settled principle of law that 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-
* Bhanagar University v. Palitana Sugar Mill (P) Ltd., (2003) 2 SCC 111- 'A decision, as is well-known, is an authority for which it is decided and not what can logically be deduced thereform. It is also well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision. [See Ram Rakhi v. Union of India AIR 2002 Del 458 (db), Delhi Admn. (NCT of Delhi) v. Manohar Lal (2002) 7 SCC 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
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Ex. & Customs [1978 (2) E.L.T. J 350 (S.C.)] that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words.
10. It is also relevant to note that, in terms of the Exemption Notifications, to constitute a brand name, it needs to be established that the same has been purposefully used to indicate a connection between the goods and the person. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of Commissioner of C. Ex., Hyderabad-IV v. Stangenlmmuno Diagnostics [2015 (318) E.L.T. 585 (S.C.)] wherein, relying on the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Chandigarh-ll v. Bhalla Enterprises [2004 (173) E.L.T. 225 (S.C.)] it was inter alia held that 'the assessee would be debarred 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
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hat such a mark, symbol, design or name, etc. has acquired the reputation of the nature that one is able to associate the said mark, etc. with the manufacturer'. In the present facts, it is the 'More trademarks' which best answer this description, having been used over a period of time to acquire the reputation associated with the subject goods. Therefore, withdrawal of the said brand name would render the subject goods unbranded, and, mere mention of Appellant's name, in terms of statutory prescription, and, absent its demonstrated association with the subject goods, would not alter this position. Also, to this extent, the reliance placed by the Impugned Order on the decision of the Hon'ble Supreme Court in the case of Stangen (supra) is erroneous and misconceived. Whereas the Impugned Order rightfully observes that 'the applicant 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
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tive basis of the findings made in the Impugned Order, it is submitted that said observation is extraneous to the terms of the Exemption Notifications as the definition of the term 'brand name' therein neither includes a 'combination of colours' nor does it borrow the meaning of 'mark' from the Trade Marks Act. It is well established inter alia in terms of the decision of the Hon'ble Supreme Court in the case of Hemraj Gordhandas v. Assistant Collector of C. Ex. & Customs [1978 (2) E.L.T. J 350 (S.C.)] that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words.
13. It is settled law that the declaration of name of the company as per the statutory requirements would not amount to 'bearing a brand name'
14. The ARA has failed to appreciate that the issue involved in the present 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 A
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Description of goods
Rate of Duty
(1)
(2)
(3)
(4)
20.01
Preparations of vegetables, fruit, nuts or other parts of plants including jams, fruit jellies, marmalades, fruit or nut puree and fruit or nut pastes, fruit juices and vegetable juices, whether or not containing added sugar or other sweetening matter.
2001.10
– Put up in unit containers and bearing brand name.
8%
2001.90
– Other
-Nil
As regards this case, it is relevant to note the following:
– The issue under consideration was the classification of goods under sub-heading 2001.10 of Chapter 20 of the Central Excise Tariff (where the conditions required to be fulfilled were, (i) that the product must be put up in unit containers, and (ii) the same must bear a brand name), or, sub-heading 2001.90 of the said chapter (which covered “others”)
– The assessee was engaged in the manufacture of vegetable preparation i.e. French Fries and Frozen foods. They had been using two
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“Under the Standard Weights and Measures (Packets Commodities) Act, 1977 every packet is required to bear thereon or on a label squarely affixed thereto a definite, plain and conspicuous declaration as to, inter alia, the name and address of the manufacturer (see Rule 6 & 10). In other words, unit containers would have to bear the name of the manufacturer. If the name of the manufacturer were to be a brand name then this would mean, that there would be no unbranded unit container at all in law and the distinctiveness of T.H. 2001.10 would be meaningless.
15. 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 which is appended to the product and which establishes the link.
16. There is a value attac
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branded goods which is highly illogical. In fact in respect of the packaged goods, there are statutory requirements that the manufacturer's or packer's name and address should be indicated on the packages of the goods under the standards of Weights & Measures Act, 1976 and the rules made thereunder'
(ii). In the case of CCEx. v. Pepsi Foods Ltd., [2015 (322) ELT A325 (SC)]; the issue under consideration was whether the printing of the name of the brand owner, could be construed to make the package a branded product. The Hon'ble Supreme Court while taking note of the definition of 'brand name' (which is similar to meaning provided to the phrase under the Exemption Notifications), and the decision in the case of Tarai Foods (supra), upheld the decision of the Hon'ble Tribunal in the assessee's own case, CCEx v. Pepsi Foods Ltd., [2003 (156) E.L.T. 1013 (Tri. – Del.)] and in the case of Nirula and Company Pvt. Ltd. v. CCEx [2005 (186) E.LT. 412 (Tri. – Del.)], stating that mere pri
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n of 'brand name', by the Department. The Hon'ble Madras High Court while taking note of the definition of 'brand name' (which is similar to the meaning provided to the phrase under the Exemption Notifications) held that the superscription 'manufactured and packed by SVS & Sons' cannot be considered as a brand name or a trade name.
19. In addition to the above, reference is made to the following circulars:
(a) Circular No. 1031/19/2016-CX, dated 14th June 2016, which was issued as regards the levy of Excise duty on readymade garments and made up articles of textiles bearing brand name or sold under a brand name having retail sale price of Rs. 1,000 or more. The Board vide the said circular clarified that 'merely because the outlets (shop) of a retailer, from where readymade garments or made ups are sold, has a name, say, M/s. XYZ and Sons, the readymade garments or made ups sold from such outlet (shop) cannot be held as branded readymade garments or made ups and become liable t
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n Notifications redundant
21. In terms of the Exemption Notifications, exemption is admissible for goods other than those put up in unit container and bearing a brand name. Further the term 'unit container' is defined to mean 'a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a predetermined quantity or number, which is indicated on such package'. In terms of the language employed, the requirement of goods being 'put up in unit container', and, bearing a 'brand name' would have to be cumulatively satisfied so as to exclude the corresponding goods from the purview of the exemption.
22. In terms of Section 18 of the Food Safety and Standards Act, 2006 ('FSSA') '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 packaged food products which are not marked and labelled in the manner as may be specified by regulation
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. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of Bansal Wire Industries Ltd v. State of U.P. [2011 (269) E.L.T. 145 (S.C.)] wherein the Hon'ble Court laid down that it is a settled principle of law that the words used in the section, rule or notification should not be rendered redundant and should be given effect to. It is also one of the cardinal principles of interpretation of any statue that some meaning must be given to the words used in the section'. Reliance in this regard is also placed on the decision of the Hon'ble Bombay High Court in the case of Bharat Cottage Industries v. Union of India [1992 (59) E.L.T. 30 (Bom.)] wherein it was held that it 'is not permissible for the Court to treat the words of the exemption notification as a mere surplus'.
24. Availability of the subject goods only at More Stores would not render the subject goods branded for the purposes of the Exemption Notifications
a. The Impugned Order wrongly
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name was printed, and, was claiming benefit under the Small Scale Exemption Notification No. 1/93-C.E. dated 28th February 1993 ('SSI Exemption') in respect of some cookies sold loosely from the same retail counter. The question before the Hon'ble Supreme Court was 'whether the manufacture and sale of specified goods that do not physically bear a brand name, from branded sale outlets, would disentitle an assessee from the benefit of S.S.I. Notification'. In this context, the Hon'ble Supreme Court inter alia held that to determine whether a product bears a brand name, one needs to look into the environment and that that 'a specific, dedicated and exclusive outlet from which a good is sold is often the most crucial and conclusive/actor to hold a good as branded'. It has been further held that 'whether the brand name appears in entirety or in parts or does not appear at all cannot be the chief criterion; primary focus has to be on whether an indication of a connection is conveyed in the
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and other such factor', specifically considering that certain goods, which would otherwise be covered under the SSI Exemption Notification, would be 'incapable of physically bearing brand names'- 'Liquids, soft drinks, milk, dairy products, powders, edible products, salt, pepper, sweets, gaseous products, perfumes, deodorants etc.to name a few, are either liquids, gases or amorphous/brittle solids, making it impossible for the goods to be affixed with a brand name'.
d. In terms of the scheme of the applicable entries to the CGST Notification, it is evident that the same covers specified goods (i.e. cereals), and, in terms of the prescribed conditions, for falling outside the ambit of the said exemption, it is necessary that the goods are sold in a unit container which bears a brand name. It is abundantly clear in terms of the entries to the CGST Notification and the Annexure thereto that the condition to be examined is whether the unit container bears the 'brand name'. To this
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ion (ii)(a) printed on the unit containers he has foregone his actionable claim or enforceable right voluntarily'
Accordingly, the decision of the Hon'ble Supreme Court in the case of Australian Foods is not applicable to the facts of the present case. Also, to this extent, the finding in the Impugned Order, that 'the goods are being supplied through the More stores which is registered brand as on the 15th May 2017', is in excess of the conditions stipulated in the Exemption Notifications, which is only concerned with the nature of disclosures made on the unit container alone.
e. Further the decision of Hon'ble Supreme Court in the Australian Foods case (supra) is clearly distinguishable on facts and therefore not applicable to the present case. It is an admitted fact that, in Appellant's case, the More Stores, constituted under hyper-market and super-market formats, offer wide range of products to its customers viz. fresh fruits and vegetables, groceries, personal care, home care, g
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in its wisdom, rightfully cautioned that 'our observations must be limited to this notification and not supplanted to other laws with similar subject matter pertaining to trade names and brand names'. The Impugned Order has thus erroneously applied the findings of the Hon'ble Supreme Court in the case of Australian Foods, dealing with the SSI Exemption Notification issued under the Central Excise law, to the present case, without appreciating that said decision itself explicitly excludes its applicability to other laws even where such other laws deal with similar subject matter pertaining to trade names and brand names.
25. Declarations made on the package, using common/generic terms for indicating the quality of the product cannot be construed to be a 'brand name'
a. As stated, for some of the subject goods, the package would also bear a certain declaration by using common/generic words for the sole purpose of indicating the quality of the product so as to enable the customers
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of the goods or rendering of the service or other characteristics of the goods or service', shall not be registered. The definition of 'trademark' as provided in Section 2(zb) of the Trade Marks Act is broadly similar to the definition of the term 'brand name' under the Exemption Notifications to the extent it includes a mark or a name that indicates 'a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark'. In view of the same, a name, which merely indicates quality parameters of the goods, should also not be construed to be a 'brand name'.
c. Accordingly, the declarations inter alia using common/generic terms viz. Value', 'Choice' and 'Superior', for reflecting the quality of the subject goods to be sold under Stream 1, cannot be construed to be 'brand name' for the purpose of the Exemption Notifications. The supply of subject goods would therefore attract GST at 'Nil' rate in terms o
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in support of their claim and also the judgments relied upon by the AAR to distinguish the same from their matter. The Advocates argued that in the judgments cited by AAR, it was never subject matter of any judgment that whether placing name of manufacturer as statutory requirement would amount to brand name. They stated that products should be identified and asked for by the name of brand name. In their case. More is the brand which they propose to remove from the packages and also no one is going to More Stores to buy only More products. Reputation is attached with brand More and not with the name of the manufacturer. Regarding case of Australian Foods relied by AAR, they stated that Court had limited observations in the matter and there is no need to look into the environment in their case in view of the GST notification. The Advocates confirmed that the Appellant is not raising the issue about point no. 2 i.e. the cases where the goods of stream will be sold by mentioning name of t
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sed to be sold under stream 2 i.e. where the goods of third parties were proposed to be marketed by the Appellant. Therefore, the issue before us to decide is :
(i) 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.
(ii) 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.
29. The notification no. 02/2017-Central Tax (Rate) dt. 28 June 2017 (and corresponding notifications under SGST Acts and IGST Act) is the central point of discussion here, exempting as it does the goods in question from whole of GST with the exclusion of those put up in unit containers and bearing a registered brand name. During the hearing proceedings, the Advocates for the Appellant had drawn our attention to the fact that to discourage the circumvention of the conditions of the notifications by the ploy of d
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oods 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 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 packaging and goods offered for sale. In modern times the term has been extended to mean a strategic personality for a product or company, so that 'brand' now suggests the values and promises that a consumer may perceive and buy into. A brand, as we understand the term now, is a name, term, design, symbol,': or other feature that distinguishes an organization or product from its rivals in the eyes of the customer. Brands ar
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hat 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.
In view of the above, there is no bar on the name of the manufacturer to be a brand name as long as it is used in relation to such specified goods for the purpose of indicating 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.
32. 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'. Therefor
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r 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 brands by way of consistent advertising and marketing to register in the minds of consumers/customers. There is accordingly a lot of value attached to such brands which hire some part of Customer's mind to differentiate the goods from rival manufacturers/brands.
33. The Appellant has largely depended on the Apex Court judgment in the case of Tarai Food Ltd. [2006(198) ELT 323(SC)] to claim that the manufacturer's name on packets is not sufficient to classify the same as branded. We would like to reproduce the para 11 of the said judgment to show that facts of the case before us are different from the facts and circumstances of the case before Hon'ble Supreme Court:
“There is a value attached to the brand name, a value which has been recognized in the tariff entry by providing
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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 said goods will continue to be sold through exclusive 'More' stores. The style, color and nature of packing will also remain unchanged, which is identified by the customers with the 'More' brand. Even the customer-care email address and website address bears the 'More Stores' name, and all billing shall be in the name of 'More Stores'. The sale bills issued to the customers continue bearing the registered trade mark of “MORE”, which gives satisfaction to the customer that the said goods, even without showing brand names of 'More' and 'Aditya Birla Retail' on the packages, still enjoy the benefit of the brand 'MORE'. The Appellant has also proposed to retain words 'CHOICE', 'VALUE' or 'SUPERIOR' on some of their goods claiming that same denote the quality of the goods and cannot be r
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ng 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 if manufacturer's name on the package, declared as per statutory requirements under FSSAI and or Legal Metrology Rules, is accepted as brand name then every packaged commodity will be considered as branded. This is not true in every case. Instead, if every reputed manufacturer whose brand name is covered in their name can just remove their brand from the package and avail the exemption of the said notification, no one would be covered under GST. For example, M/s. Patanjali Ayurved Ltd. selling Cow Ghee under the registered brand name 'Patanjali' were to remove the said brand from the package and sell the same under manufacturer's name, this will not render the said goods unbranded, because the customer will identify the said goods with the brand 'Patan
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oods, 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. The customers, by reading the name on the packages as 'Aditya Birla Retail Limited', would be in a position to identify the said goods as belonging to the reputed brand 'Aditya Birla Retail' even in absence of the logo of that brand on the goods. The purpose of Appellant for taking advantage of their reputed brand, even in absence of its logo on the goods, seems to be fulfilled by mention of words 'Aditya Birla Retail Limited'. Additionally, the use of specific words like 'Choice', 'Value,' or 'Superior', whi
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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 said brand on the goods itself and Hon'ble Apex Court has ruled, in similar case, that physical manifestation of brand name is not compulsory on goods. A harmonious reading of the notification and Supreme Court judgment makes it clear that the said goods in the instant case are branded even if the registered brand name logos are removed from the same.
(b) Astra Pharmaceuticals (P) Ltd. [1995 (75) ELT 214 (SC)], has been clarified and distinguished by three member bench of Hon'ble Apex Court in the judgment of M/s Grasim Industries Ltd.,[2005 (183) ELT 123 (SC)], wherein the mention of a name of company on the packaging was considered as branding of those goods. This judgment has been relied by the AAR an
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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)], the issue was regarding the goods being 'Marketed by' which is not the case here as the Appellant has already withdrawn the question regarding goods to be sold by them as Marketed by them.
(d) Kalvert Foods India Pvt. Ltd. [2011(270) ELT 643(SC)] pertains to the distinction between House Mark and Brand Name and relies on the judgement of Astra Pharmaceuticals and Tarai Foods Ltd., thus distinguishable on facts.
(e) In case of Stangenlmmuno Diagnostics, [2015(318) ELT 585(SC)], the issue pertained to the use of brand name of other person. Two persons were using same logo/trademark simultaneously.
(f) Bhalla Enterprises, [2004(173) ELT 225(SC)], same bra
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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 enlarges the term and scope of the notification not permissible nor extended meaning assignable to exempted item”
(b) B.P.L Ltd. v. COMMR. Of C. Ex. Cochin- II, [2015 (319) ELT 556(SC)]-
“Interpretation of statutes – Exemption notifications – They have to be interpreted strictly – It is assessee to prove that he fulfills all conditions of eligibility under such Notifications.”
The above case was affirmed in 2015 (324) A 79 (Supreme Court).
40. The two circulars issued by CBEC, now CBIC, relied upon by the Appellant, are not relevant in the matter as one pertains to the deemed manufacture and liability to excise
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an 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 'VALUE', 'CHOICE' or ' SUPERIOR' on the proposed packing, without altering the surrounding environment to take advantage of brand 'MORE', would be construed as 'brand name' for the purpose of Exemption Notification.
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1. For the purpose of the determination of the questions under this Appeal, which would require reference to be made to the Exemption Notifications, the relevant entries under the CGST Notification have been considered in this application, which are identical to the corresponding entries under the SGST Notification and the IGST Notification.
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