Brand name on components did not defeat exemption where supply was made to customer order under binding interpretation.

Use of another person's brand name on membrane switch pads manufactured as components to order was stated not to defeat exemption under Notification No. 1/93 where the branding was pursuant to supply for the customer's electronic equipment and not in the course of trade. The text also states that a binding Larger Bench interpretation governed the issue and displaced an earlier contrary view. On that basis, the pre-deposit condition was described as unjustified for deciding the appeal on merits, and the matter was to be reconsidered in accordance with the Larger Bench ruling.

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Issues: (i) Whether membrane switch pads manufactured on the order of another person and bearing that person's brand name were disqualified from exemption under Notification No. 1/93; (ii) whether the appeal could be disposed of without insisting on pre-deposit in view of the binding Larger Bench decision.

Issue (i): Whether membrane switch pads manufactured on the order of another person and bearing that person's brand name were disqualified from exemption under Notification No. 1/93.

Analysis: The appellant manufactured the goods as components for use by the customer in its electronic equipment, and the branding was affixed pursuant to that order. A Larger Bench had already interpreted the relevant notification to hold that such use of another's brand name, when connected with supply of components and not in the course of trade, falls within the explanation to the notification. That ruling was binding and displaced the earlier contrary decision relied upon by the Commissioner (Appeals).

Conclusion: The use of the brand name in these circumstances did not disqualify the goods from the exemption on the basis taken by the lower authority, and the contrary view could not be sustained.

Issue (ii): Whether the appeal could be disposed of without insisting on pre-deposit in view of the binding Larger Bench decision.

Analysis: Since the binding Larger Bench ruling covered the legal issue in favour of the appellant, the pre-deposit condition imposed by the Commissioner (Appeals) was not justified for deciding the appeal on merits.

Conclusion: The matter was required to be considered by the Commissioner (Appeals) without insisting upon pre-deposit.

Final Conclusion: The appeal succeeded to the extent that the pre-deposit requirement was set aside and the matter was sent back for fresh decision in accordance with the binding Larger Bench view.

Ratio Decidendi: Where a Larger Bench has authoritatively construed an exemption notification, that interpretation binds subsequent benches and must be applied to determine whether use of another's brand name on goods supplied as components defeats the exemption.

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