Small scale exemption denied where goods bore a foreign manufacturer's brand name and the brand owner was ineligible.

Small scale exemption under Notification No. 175/86-C.E. was unavailable where the assessee's goods bore the brand name of a foreign manufacturer. The free abrasive machines were admittedly marked "FAM", a brand belonging to a Japanese company, and the matter was governed by a Larger Bench view relied on by the Revenue. On that basis, the brand owner was ineligible for the exemption, and the assessee could not claim the same benefit through use of that brand name.

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Issues: Whether the assessee was entitled to the benefit of exemption under Notification No. 175/86-C.E. when the goods manufactured by it were affixed with the brand name of a foreign manufacturer.

Analysis: The facts were admitted that the free abrasive machines bore the brand name "FAM", which belonged to a Japanese company. The issue was already covered by the Larger Bench decision relied upon by the Revenue, and the brand owner was not eligible for the small scale exemption.

Conclusion: The assessee was not entitled to the benefit of exemption under the notification.

Final Conclusion: The order of the appellate authority was set aside and the order-in-original was restored, resulting in allowance of the Revenue's appeal.

Ratio Decidendi: A unit is not entitled to small scale exemption under Notification No. 175/86-C.E. where the manufactured goods bear the brand name of another entity that is ineligible for the exemption.

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