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CASE NO.: Appeal (civil)  8739-8741 of 2001

PETITIONER: M/s. Meghraj Biscuits Industries Ltd

RESPONDENT: Commissioner of Central Excise,U.P.

DATE OF JUDGMENT: 14/03/2007

BENCH: S.H. KAPADIA & B. SUDERSHAN REDDY

JUDGMENT: J U D G M E N T

KAPADIA, J.

       Aggrieved by the decision of Customs, Excise and  Gold Control Appellate Tribunal (CEGAT) dated  11.4.2000, the appellants (assessee) have come by way of  civil appeals under Section 35L of the Central Excise Act,  1944. Appellants were engaged in the manufacture of  biscuits classifiable under Sub-Heading 1905.11 of the  Central Excise Tariff.  The biscuits were sold under the  brand name "Meghraj".  Under show cause notices it was  alleged that the appellants herein (assessee) have sold  the biscuits under the brand name "Meghraj", which was  a registered trade mark of Kay Aar Biscuits (P) Ltd. who  was using the said trade mark on manufacture of  biscuits themselves, and, therefore, the appellants were  not eligible to the benefit of SSI Notification No.1/93-CE  dated 28.2.1993 as amended by Notification No.59/94- CE dated 1.3.1994.  The above show cause notices were  issued by the Department demanding differential duty for  the period April 1994 to June 1994 amounting to  Rs.3,74,948/- plus short paid duty for the period April  1995 to May 1995 amounting to Rs.92,992.  The said  demand was based on an agreement detected by the  Department.  That Agreement was between Madan  Verma, Director of a company known as M/s. Kay Aar  Biscuits (P) Ltd., Ghaziabad, and M/s. Rich Food  Products (P) Ltd., Noida.  Under the said Agreement M/s.  Kay Aar Biscuits (P) Ltd. was Party No.1.  Under the  Agreement it was declared that M/s. Kay Aar Biscuits (P)  Ltd.  was the owner of the registered trade mark  "Meghraj".  Under the Agreement it was stated that M/s.  Kay Aar Biscuits (P) Ltd.  was using the aforestated trade  mark "Meghraj" for the manufacture of biscuits.  Under  the Agreement there was a recital under which it was  stated that M/s. Rich Food Products (P) Ltd. had put up  a Unit for manufacture of wafers in Noida which it sought  to manufacture under the brand name "Meghraj".  Under  the said Agreement M/s. Kay Aar Biscuits (P) Ltd. gave  permission to M/s. Rich Food Products Pvt. Ltd. to use  its trade mark for the manufacture of wafers alone.  The  said agreement was valid for three years commencing  from 22.11.1989.  At this stage, it may be noted that the  appellants herein claim to have started manufacture of  biscuits in 1991.  The biscuits were sold in wrapper  mentioning the name of the appellants, "M/s. Meghraj  Biscuits Industries Ltd." or "Meghraj".  The Appellants

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claimed that it has been using the wrapper since  beginning and since 1991 the use of the trade name or  brand name "Meghraj" has never been challenged.  The  Assistant Commissioner, Ghaziabad, examined the  printed wrappers.  He came to the conclusion vide his  orders that the trade name "Meghraj" was in the form of  a logo printed on the wrapper of the biscuits and,  therefore, the appellants were not entitled to the benefit  of Notification No.1/93-CE dated 28.2.93 as amended by  Notification No.59/94 dated 1.3.94.  Consequently, the  Adjudicating Authority called upon the appellants to pay  differential duty for the period April 1994 to June 1994  amounting to Rs.3,74,948 plus short paid duty for the  period April 1995 to May 1995 amounting to Rs.92,992.          Aggrieved by the decision of the Adjudicating  Authority, the assessee preferred appeals to the  Commissioner (A).  The said appeals were rejected on the  ground that the appellants were using the brand name  "Meghraj" of another manufacturer M/s. Kay Aar Biscuits  (P) Ltd. on their products (biscuits) and, therefore, they  were not entitled to the benefit of exemption under  Notification No.1/93-CE, as amended.  It was held that  the word "Meghraj" was printed on all the printed  wrappers and, therefore, it was wrong to say that the  appellants were not using the brand name "Meghraj" on  its products.  In this connection, reliance was placed by  the Commissioner (A) on the said Agreement dated  22.11.89.  Before the Commissioner (A) the appellants  herein contended that they had used the name "M/s.  Meghraj Biscuits Industries Ltd." on the wrapper and not  on the product and, therefore, they were entitled to  exemption.  This argument was rejected by the  Commissioner (A) saying that the appellants were using  the brand name "Meghraj" on their products.  According  to the Commissioner (A), the appellants used the trade  name "Meghraj" in the form of a logo which was printed  on the wrapper.  Before the Commissioner (A), it was  argued in the alternative that the logo belonged to M/s.  Kay Aar Biscuits (P) Ltd.; that the same was registered  SSI Unit; that M/s. Kay Aar Biscuits (P) Ltd. was lying  closed since 1.3.93 and, therefore, the appellants have  been using that logo of M/s. Kay Aar Biscuits (P) Ltd.  who was eligible for exemption under Notification  No.1/93-CE, as amended.  This contention was rejected  by the Commissioner (A) on the ground that under the  Notification No.1/93-CE, as amended, exemption was not  available to the specified goods bearing brand name or  trade name (registered or not) of another person.  Since,  the appellants herein had used the trade name "Meghraj"  on their products which trade name was owned by M/s.  Kay Aar Biscuits (P) Ltd. the appellants were not entitled  to the benefit of exemption under Notification No.1/93- CE, as amended.  Accordingly, the Commissioner (A)  dismissed the appeals.  The orders of the Commissioner  (A) have been confirmed by Order dated 11.4.2000  passed by CEGAT. Hence, these civil appeals.   

To complete the chronology of events, it may be  pointed out that after the impugned decision of the  Tribunal dated 11.4.2000, the appellants herein moved  an Application for Rectification on 12.5.2000 (ROM  No.72/2000).  In that application it was urged on behalf  of the appellants herein that the said brand name  "Meghraj" did not belong to M/s. Kay Aar Biscuits (P)

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Ltd.; that the Department has failed to discharge its  burden to prove that the trade name "Meghraj" belonged  to M/s. Kay Aar Biscuits (P) Ltd.; that a mere Agreement  between M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich  Food Products (P) Ltd. would not be sufficient to prove  that M/s. Kay Aar Biscuits (P) Ltd. was the lawful owner  of the brand name "Meghraj".  In the Rectification  Application it was further pointed out that in fact the  appellants had applied for ownership of the brand name  "Meghraj" vide application dated 30.9.91 to the Registrar,  Trade Marks under the Trade Marks Act and that the  said application for registration was pending before the  competent authority and since the above arguments were  not recorded in the impugned Order of the CEGAT dated  11.4.2000 the same warranted rectification.     

By Order dated 8.12.2000, CEGAT rejected the  above Rectification Application made by the Appellants.   

One more fact needs to be mentioned that on  30.6.2000 the Registrar of Trade Marks appears to have  issued Registration Certificate on 30.6.2000 registering  the trade mark "Meghraj" in favour of the appellants with  effect form 30.9.91.  It appears that issuance of this  certificate was mentioned before the CEGAT which  rejected the Rectification Application on 8.12.2000.

Notification No.1/93-CE dated 28.2.93 was issued  to help the SSI Units to survive in the market dominated  by brand name/trade name.  The object of the  Notification, therefore, was to help the SSI Units and  thereby increased industrial production.  Under para ’4’  of the said Notification, the benefit of exemption was not  available for excisable goods bearing brand name or trade  name (registered or not) of another person.  Explanation  IX defined the word "brand name" or "trade name".  The  same is quoted hereinbelow: "Explanation IX \026 "Brand name" or  "trade name" shall mean a brand name or  trade name, whether registered or not,  that is to say a name or a mark, such as  symbol, monogram, label, signature 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."          Notification No.1/93-CE dated 28.2.1993 was  subsequently amended by Notification No.59/94 dated  1.3.94.  Para ’7’ of Notification No.1/93-CE as amended  read as under: "Para-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."

In the present case, as stated above M/s. Kay Aar

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Biscuits (P) Ltd entered into an agreement on 22.11.89  with M/s. Rich Food Products (P) Ltd.  Under that  Agreement the Director of M/s. Kay Aar Biscuits (P) Ltd.  declared that his company was the owner of the  registered trade mark "Meghraj".  The name of that  Director is Madan Verma.  He is the Director of the  appellants (company) also.  Further there is no evidence  to show as to whether M/s. Kay Aar Biscuits (P) Ltd. was  an "eligible manufacturer".  This aspect is important  since one of the arguments advanced by the appellants  herein before the Commissioner (A) was that the trade  mark belonged to M/s. Kay Aar Biscuits (P) Ltd., which  was registered SSI Unit lying closed since 1.3.1993.  No  explanation has been given as to why Madan Verma has  not been examined by the appellants.  He has not been  examined even on the question of alleged transfer of the  trade mark in favour of the appellants.  In the  circumstances, we do not find any merit in this appeal.

On behalf of the appellants it has been vehemently  argued that M/s. Kay Aar Biscuits (P) Ltd. was never the  registered owner of the trade mark "Meghraj".  It was  urged that merely because an Agreement stood entered  into on 22.11.89 between M/s. Kay Aar Biscuits (P) Ltd.  and M/s. Rich Food Products (P) Ltd., the Department  had erred in alleging that the trade mark belonged to  M/s. Kay Aar Biscuits (P) Ltd.  It was urged that M/s.  Kay Aar Biscuits (P) Ltd. had never got the trade mark  registered under the Trade Marks Act.  It was urged that  a false declaration was made by M/s. Kay Aar Biscuits (P)  Ltd. under the above Agreement on 22.11.89.  It was  urged that a mere agreement between two parties cannot  constitute ownership of the trade mark in favour of M/s.  Kay Aar Biscuits (P) Ltd.  It was urged that in any event  M/s. Kay Aar Biscuits (P) Ltd. had stopped its production  in 1993; that the company had become defunct; that the  appellants herein had applied to the Registrar of Trade  Marks for registration of the mark "Meghraj" and vide  registration certificate dated 30.6.2000 the Registrar has  recognized the appellants as owner of the trade mark  with effect from 30.9.91.  In the circumstances, the  appellants submitted that the demand for differential  duty was unwarranted.   

We do not find any merit in the above arguments.   In the case of Pahwa Chemicals Pvt. Ltd. v.  Commissioner of Central Excise, Delhi \026 2005 (189)  ELT 257 (SC) this Court has held that the object of the  exemption Notification was neither to protect the owners  of the trade mark nor the consumers from being misled.   These are considerations which are relevant in disputes  arising out of infringement/passing of actions under the  Trade Marks Act.  The object of the Notification is to  grant benefits only to those industries which otherwise  do not have the advantage of a brand name [See: para  ’3’].

Applying the ratio of the above judgment to the  present case, it is clear that grant of registration  certificate under the Trade Marks Act will not  automatically provide benefit of exemption to the SSI  Unit.

In the case of Commissioner of Central Excise,  Chandigarh v. Bhalla Enterprises \026 2004 (173) ELT

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225 (SC), this Court held that the assessee will not be  entitled to the benefit of exemption if it uses on goods in  question, same/similar brand name with intention of  indicating a connection with the goods of the assessee  and such other person or uses the name in such manner  that it would indicate such connection.  It was further  held that the burden is on the assessee to satisfy the  Adjudicating Authority that there was no such intention  [See: paras 6 and 7].

Applying the above test to the facts of the present  case, Madan Verma is a common Director in the two  companies.  He has filed an affidavit enclosing the  registration certificate dated 30.6.2000.  However, in that  Affidavit he has not stated as to on what basis, in the  Agreement of 23.11.89 signed by him, he had declared  that M/s. Kay Aar Biscuits (P) Ltd. is the owner of the  registered trade mark "Meghraj".  There is no deed of  assignment from M/s. Kay Aar Biscuits (P) Ltd. in favour  of the appellants herein.  The Department has rightly  placed reliance on the Agreement of 23.11.89.  In the  circumstances, the burden was on the assessee  (appellants herein) to satisfy the Adjudicating Authority  that there was no intention of indicating a connection  with the goods of the assessee and such other person.

Before us it has been urged that M/s. Kay Aar  Biscuits (P) Ltd. is non-functional since 1.3.93 and,  therefore, in any event appellants were entitled to use the  trade mark "Meghraj".  This argument is based on the  concept of abandonment.  We do not find any merit in  this argument.  Discontinuation of business in respect of  a product does not necessarily amount to abandonment.   In the present case, there is no evidence from the side of  the appellants indicating abandonment of the trade mark  by M/s. Kay Aar Biscuits (P) Ltd.  Although, Madan  Verma, the Director of M/s. Kay Aar Biscuits (P) Ltd., has  filed his Affidavit enclosing the registration certificate, he  has nowhere stated that M/s. Kay Aar Biscuits (P) Ltd.  has abandoned the trade mark.  In the circumstances,  the Department was right in rejecting the above  contention.  Abandonment of the trade mark has to be  proved by the appellants in the present case.  The burden  is on the appellants, particularly, when the Department  is relying upon the agreement dated 23.11.89 between  M/s. Kay Aar Biscuits (P) Ltd. and M/s. Rich Food  Products (P) Ltd.

Lastly, we are required to examine the retrospective  effect of the registration certificate dated 30.6.2000 with  effect from 30.9.91.  At the outset, we may reiterate that  the object of the exemption Notification was neither to  protect the owners of the trade mark nor the consumers  from being misled.  These are considerations which are  relevant in disputes arising under the Trade Marks Act.   The object of the exemption Notification No.1/93-CE was  to grant benefits to those industries which do not have  the advantage of a brand name.  However, since  retrospective nature of the registration certificate dated  30.6.2000 is repeatedly being raised in this Court we  would like to examine the case law in this regard.

The Trade Marks Act, 1999 has been enacted to  amend and consolidate the law relating to trade marks,  to provide for registration and better protection of trade

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marks and for prevention of the use of fraudulent marks.   Under Section 28 of the Trade Marks Act, 1999,  registration gives to the registered proprietor of the trade  mark the exclusive right to the use of the trade mark in  relation to the goods in respect of which the trade mark  is registered and to obtain relief in respect of  infringement of the trade mark in the manner provided  by the Trade Marks Act.  It is correct to say that the  Registrar, Trade Marks, can issue registration certificate  under Section 28 of the Trade Marks Act with  retrospective effect.  The question before us is : what is  the effect of issuance of registration certificate with  retrospective effect.  This question has been decided by  the Bombay High Court in the case of Sunder  Parmanand Lalwani and Others v. Caltex (India) Ltd. \026  AIR 1969 Bombay 24 in which it has been held vide  paras ’32’ and ’38’ as follows: "32. A proprietary right in a mark can be  obtained in a number of ways. The mark can  be originated by a person, or it can be  subsequently acquired by him from somebody  else. Our Trade Marks law is based on the  English Trade Marks law and the English Acts.  The first Trade Marks Act in England was  passed in 1875. Even prior thereto, it was  firmly established in England that a trader  acquired a right of property in a distinctive  mark merely by using it upon or in connection  with goods irrespective of the length of such  user and the extent of his trade, and that he  was entitled to protect such right of property  by appropriate proceedings by way of  injunction in a Court of law. Then came the  English Trade Marks Act of 1875, which was  substituted later by later Acts. The English  Acts enabled registration of a new mark not till  then used with the like consequences which a  distinctive mark had prior to the passing of the  Acts. The effect of the relevant provision of the  English Acts was that registration of a trade  mark would be deemed to be equivalent to  public user of such mark. Prior to the Acts,  one could become a proprietor of a trade mark  only by user, but after the passing of the Act of  1875, one could become a proprietor either by  user or by registering the mark even prior to  its user. He could do the latter after complying  with the other requirements of the Act,  including the filing of a declaration of his  intention to use such mark. See observations  of Llyod Jacob J. in 1956 RPC 1. In the matter  of Vitamins Ltd’s Application for Trade Mark at  p.12, and particularly the following: "A proprietary right in a mark  sought to be registered can be  obtained in a number of ways. The  mark can be originated by a person  or can be acquired, but in all cases  it is necessary that the person  putting forward the application  should be in possession of some  proprietary right which, if  questioned, can be substantiated". Law in India under our present Act is similar.                         

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38. A person may become a proprietor of a  trade mark in diverse ways. The particular  mode of acquisition of proprietorship relied  upon by the applicant in this case is of his  user for the first time in India in connection  with watches and allied goods mentioned by  him of the mark "Caltex", which at the material  time was a foreign mark belonging to  Degoumois & Co. of Switzerland and used by  them in respect of watches in Switzerland.  Before the Deputy Registrar and before Mr.  Justice Shah, proprietorship was claimed on  the basis that the applicant was entitled to it  as an importer’s mark. Several authorities  were cited and were considered and principles  deduced and relied upon in that behalf. In our  opinion, it is not necessary in this case to go  into details about facts in the various decided  cases dealing with importer’s marks. In many  of those cases, the dispute was between a  foreign trader using a foreign mark in a foreign  country on goods which were subsequently  imported by Indian importers and sold by  them in this country under that very mark. In  short it was a competition between a foreign  trader and the Indian importer for the  proprietorship of that mark in this country. We  have already reached a conclusion that so far  as this country is concerned, Degoumois & Co.  have totally disclaimed any interest in the  proprietorship of that mark for watches etc. In  India, the mark "Caltex" was a totally new  mark for watches and allied goods. The  applicant was the originator of that mark so  far as that class of goods is concerned, and so  far as this country is concerned. He in fact  used it in respect of watches. There is no  evidence that that mark was used by anyone  else in this country before the applicant, in  connection with that class of goods.  Unquestionably, the applicant’s user was not  large, but that fact makes no difference,  because so far as this country is concerned,  the mark was a new mark in respect of the  class of goods in respect of which the applicant  used it. We therefore, hold that the applicant is  the proprietor of that mark."     [emphasis supplied]                  On reading the above quoted paragraphs from the  above judgment, with which we agree, it is clear that the  effect of making the registration certificate applicable  from retrospective date is based on the principle of  deemed equivalence to public user of such mark.  This  deeming fiction cannot be extended to the Excise Law.  It  is confined to the provisions of the Trade Marks Act.  In a  given case like the present case where there is evidence  with the Department of the trade mark being owned by  M/s. Kay Aar Biscuits (P) Ltd. and where there is  evidence of the appellants trading on the reputation of  M/s. Kay Aar Biscuits (P) Ltd. which is not rebutted by  the appellants (assessee), issuance of registration  certificate with retrospective effect cannot confer the  benefit of exemption Notification to the assessee.  In the  present case, issuance of registration certificate with

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retrospective effect from 30.9.91 will not tantamount to  conferment of exemption benefit under the Excise Law  once it is found that the appellants had wrongly used the  trade mark of M/s. Kay Aar Biscuits (P) Ltd.

       In the case of Consolidated Foods Corporation v.  Brandon and Co., Pvt. Ltd. \026 AIR 1965 Bombay 35, it  has been held vide paras ’27’ and ’30’ that the Trade  Marks Act merely facilitates the mode of proof.  Instead of  compelling the holder of a trade mark in every case to  prove his proprietary right, the Act provides a procedure  whereby on registration the owner gets certain facilities  in the mode of proving his title.  We quote hereinbelow  paras ’27’ and ’30’ of the said judgment which read as  follows: "(27) At any rate, it must be remembered that  in this case I am not dealing with a passing-off  action or an action for infringement of a trade  mark which is alleged to be common property.  The case put up by the petitioner corporation  that it was the first to use the mark "Monarch"  in this country on its food products and that,  in as much as the mark "Monarch" was  admittedly a distinctive mark, it had acquired  the right to get the mark registered in its name  and also the right to oppose the application of  any other trader in this country seeking to get  that mark registered in his name in respect of  the food products manufactured or sold by  him. Apparently, in such a case there is no  question of infringement of any right of  property in a trade mark for which any relief is  sought, nor is there any question of passing- off, so that it might be necessary to enter into  questions of nicety as regards whether there  could or could not be any property in a trade  mark. As already stated by me while referring  to the observations of Sir John Romily, it is not  really necessary for me to decide in this case  as to whether there could or could not be any  property in a trade mark for the purpose of  deciding this case. Even if it is found to be  necessary to decide this question as to  property in a trade mark, I have already  pointed out that the Courts of Equity in  England granted relief in cases of infringement  of trade marks on the basis of infringement of  the right of property in the trade mark. There  was no other basis on which those Courts  could give any relief to the plaintiffs in such  cases and for the purpose of such relief the  Courts of Equity did not require the plaintiff to  prove that his mark by any length of user was  associated in the minds of the public with his  goods. All that was necessary for the plaintiff  to prove was that he had used that mark in  respect of his particular type of goods. That  was enough in the eyes of the Courts of Equity  to entitle him to a relief by way of an  injunction in case of an infringement of his  mark by some other trader. I have also pointed  out that the statute which came to be enacted  in England in 1875 and the subsequent  statutes did nothing more than to embody the  rights in relation to trade marks which were

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already laid down by the Courts of Equity. As a  matter of fact, the statute enabled a person to  have registered a mark not only which he had  been using but also a mark which he proposed  to use. The latter type of mark would evidently  refer to a distinctive mark, a mark which does  not directly describe the nature or quality of  the goods to which it is attached. In cases of  such marks, whereas the Courts of Equity did  require some slight user before the proprietor  thereof could institute an action for  infringement thereof, the statute enabled the  registration of such mark without any user at  all, because such mark being distinctive per se  it was not necessary for the person applying  for its registration to show that mark had  acquired a reputation in the market, so that it  could be associated only with his goods and of  nobody else. Even so far as this country is  concerned, the Trade Marks Act of 1940 does  not seem to have made any change in the legal  rights of the owner of a trade mark as  established by the Courts of Chancery in  England. In In re Century Spinning and  Manufacturing Co. Ltd., 49 Bom LR 52 : (AIR  1947 Bom 445), Chagla, J. (as he then was)  observed in this connection (at page 59 of Bom  LR : ( at p. 449 of AIR)) as follows : "The question is whether in India  the Trade Marks Act of 1940 has  made any change in the legal rights  of the owner of a trade mark. To my  mind it is clear that even prior to  the passing of this Act the owner of  a trade mark could maintain an  action for the infringement of a  trade mark and that action could  only be maintained on the  assumption that he was the owner  of the trade mark and he had a  proprietary right in the trade mark.  Sub-clause (I) of Section 20 of the  Trade Marks Act itself assumes and  implies that such a right existed in  the owner of a trade mark because it  says that the unregistered holder of  a trade mark can maintain a suit for  the infringement of a trade mark  provided that the trade mark was in  use before February 25, 1937, and  an application for registration had  been made and refused." As regards the question whether there could  be any property in a trade mark, the learned  Judge further observed (on the same page) as  follows: "Again, turning to S. 54 of the  Specific Relief Act, which deals with  cases when a perpetual injunction  may be granted the Explanation to  that section lays down that for the  purpose of that section a trade mark  is property. Therefore, if a person  invaded or threatened to invade the  other’s right to, or enjoyment of,

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property, the Court under Section  54 had the discretion to grant a  perpetual injunction, and trade  mark was as much property for the  purpose of S. 54 as any other kind  of property. I, therefore, agree with the learned  Advocate General that all that the  Trade Marks Act has done is to  facilitate the mode of proof. Instead  of compelling the holder of a trade  mark in every case to prove his  proprietary right before he could ask  the Court to grant him an  injunction, the Trade Marks Act  provides a procedure whereby by  registering his trade mark the owner  gets certain facilities in the mode of  proving his title. For instance, under  S.23 of the Trade Marks Act  registration is to be prima facie  evidence of the validity of the trade  mark." This was precisely the view which was  expressed by Lord Justice Romer in (1905) I  KB 592 to which I have already referred in the  earlier part of the judgment. To summarise,  therefore, a trader acquires a right of property  in a distinctive mark merely by using it upon  or in connection with his goods irrespective of  the length of such user and the extent of his  trade. The trader who adopts such a mark is  entitled to protection directly the article having  assumed a vendible character is launched  upon the market. As between two competitors  who are each desirous of adopting such a  mark, "it is, to use familiar language, entirely a  question of who gets there first." Gaw Kan Lye  v. Saw Kyone Saing, AIR 1939 Rang 343 (FB).  Registration under the statute does not confer  any new right to the mark claimed or any  greater right than what already existed at  common law and at equity without  registration. It does, however, facilitate a  remedy which may be enforced and obtained  throughout the State and it established the  record of facts affecting the right to the mark.  Registration itself does not create a trade  mark. The trade mark exists independently of  the registration which merely affords further  protection under the statute. Common law  rights are left wholly unaffected. Priority in  adoption and use of a trade mark is superior  to priority in registration." (30) It was next contended by Mr. Shavaksha  that the respondent company had itself shown  Kipre and Co. Private Ltd., as the proprietors  of the mark on the labels bearing the mark  "Monarch" on the different kinds of its food  products and, therefore, the respondent  company had no right to apply for registration  in its favours as if it was the proprietor thereof.  It was conceded by Mr. Shah that the labels  which were used on the food products  manufactured by Kipre and Co. Private Ltd,

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did bear the name of Kipre and Co. Private Ltd.  immediately below the mark "Monarch" and  that the respondent company’s name was  printed below it as sole distributors. Mr. Shah,  however, contended that by an agreement Ex.  F. made between the respondent company and  Kipre and Co. Private Ltd. in 1951 it was  clearly provided that the mark "Monarch"  belonged to the respondent company, that  Kipre and Co. Private Ltd. were only to  manufacture the food products as ordered by  the respondent company and that the food  products so manufactured were to be bottled  and packed by them for its use and benefit  and that, therefore, in spite of Kipre and Co.’s  name appearing on the labels, the respondent  company was the true proprietor of the mark  "Monarch" and that, therefore, it was entitled  to apply for its registration as proprietor  thereof. Now, once again turning to the  provisions of section 18 sub-section (I), it is  clear that only a person claiming to be the  proprietor of a trade mark used by him or  proposed to be used by him could make an  application to the Registrar for the registration  thereof. According to this provision, not only a  person should claim to be the proprietor of a  trade mark but he should prove that he had  used it as such proprietor on his goods. Then  turning to the label as it stood at the date of  the application, two names appeared on the  label, one of Kipre and Co. and the other of the  respondent company. If these two names had  stood by themselves without any further  description of either of them, it could be said  that both Kipre and Co. and the respondent  company were jointly the owners of the mark  as well as the owners of the goods to which the  label was affixed. But, that is not the case. The  respondent company is described as the sole  distributors on the label. The reasonable  inference that could be drawn from this  description surely is that the goods were the  property of Kipre and Co. and so also the  mark. If the respondent company was really  the proprietor of the mark and also the owner  of the goods one would expect some such  words as "Manufactured by Kipre and Co. for  Brandon and Co., Private Ltd." In the absence  of any such words, a person buying any of  these goods on reading the label would  naturally believe that what he was buying was  the property of Kipre and Co. which was selling  its goods under the mark "Monarch". It is true,  as contended by Mr. Shah, that even  distributors and sellers may have marks of  their own, but then, there are ways and ways  of indicating on the label itself that the mark  embodied therein is the mark belonging to  such distributor or seller. Obviously, therefore,  on the label as it stood, it could not be said  that the respondent company was the  proprietor of the mark "Monarch" nor could it  be said that the mark was used by the  respondent company as proprietor thereof."

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(emphasis supplied) Applying the principle of deemed equivalence we  may clarify that if the SSI unit wrongly affixes a trade  mark of another person, be it registered or not, or if it  uses the trade mark of an ineligible person then such  default would not be eliminated by the above principle of  deemed equivalence embodied in Section 28 of the  Trade Marks Act, 1999 as that principle is based on a  deeming fiction which fiction is confined only to the  provisions of the Trade Marks Act.

Before concluding we may refer to the Judgment of  this Court in the case of Commissioner of Central  Excise, Mumbai v. Bigen Industries Ltd. \026 2006 (197)  ELT 305.  In that matter a show cause notice was issued  calling upon the assessee to show cause why the  exemption be not denied to the assessee.  In para ’19’ of  the show cause notice the authority accepted the  existence of a deed of assignment.  However, the show  cause notice denied the exemption on the ground that  Notification No.140/83-CE did not make any distinction  between a brand name owned by a person in India or  abroad.  In the present case, the facts are entirely  different.  In the present case, there is no deed or  assignment from M/s. Kay Aar Biscuits (P) Ltd. to the  M/s. Meghraj Biscuits Industries Ltd. (appellants herein).   As stated above, there is no proof of acquisition on  payment or consideration by the appellants to M/s Kay  Aar Biscuits (P) Ltd.  In the present case, there is no  evidence of assignment or licence from M/s. Kay Aar  Biscuits (P) ltd. to the appellants.  In the present case, we  are concerned with the retrospective effect of the  certificate issued by the Registrar of Trade Marks on  30.6.2000 with effect from 30.9.91.  In the  circumstances, the judgment of this Court in the case of  Bigen Industries (Supra) has no application.

For the aforestated reasons, we do not find any  merit in these civil appeals.  Before concluding we may  point out that we do not wish to express any opinion on  the subsequent events which have taken place in this  case.  Our judgment is confined only to the period in  question under the impugned show cause notices.

Accordingly, the civil appeals stand dismissed with  no order as to costs.