Restriction to use trade mark beyond a physical area limit does not automatically make it usable within the allowed area if same belongs to other person- SC

Brief of the case:

The Hon’ble Supreme court in the case of Kali Aerated Water Works held that the restricted right to use of any trade mark and trade name does not make it use as use of brand name belonging to others since the assessee has right to use though restricted as mutually agreed between some parties.

Thus, the use of trade name and mark by the assessee within his own marketing area is use of brand name belonging to his and not others

Facts of the case:

• The assessee is a Small Scale Industrial Unit ( SSI Unit) engaged in manufacturing Aerated Water under various brand names using the trade mark with the “Kalimark” / M/s.Kali Aerated Water Works” .

• It sought exemption from payment of excise duty in terms of Notification 1/93-CE dated 28.2.1993 (as amended vide Notification No.59/94-CE dated 1.3.1994) for the aforesaid goods manufactured in its factory.

• The exemption was denied by the department on the ground that trademarks (brand name) “Kalimark” has been used on the goods which belong to M/s. Shri K.P.R.Shakthivel. Since the goods are manufactured under the brand name of some other person the exemption is not available as this is one of the condition for availing exemption under the aforesaid notification.

• The tribunal decided the case in favour of department by concluding that in view of agreement signed by the parties to family business after partition the ownership of the aforesaid trademark/brand name `Kalimark’ no longer remained with the appellant assessee and it belongs to the other party. Thus, the assessee has been using the trade mark/brand name of the third party. , aggrieved by the same the assessee is in appeal before the Hon’ble Supreme Court.

Contention of the Assessee: