Sales tax exemption limited to goods not carrying another unit's brand name; burden lies on the manufacturer to prove non-use.

A newly set up small-scale industry that uses an existing industrial unit's brand name or trade mark is excluded from sales tax exemption only for the goods on which that mark is actually used. A literal reading that would deny exemption for all products was rejected as inconsistent with the object of the rule. The manufacturer bears the burden of proving that the particular goods claimed are not marketed under the existing unit's brand name. Exemption was therefore available for the goods not carrying the existing brand name, but not for the goods marketed under it.

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Issues: Whether a newly set up small-scale industry using the brand name or trade mark of an existing industrial unit in respect of only part of its products is wholly disentitled to exemption from sales tax under rule 3(66a) of the Bengal Sales Tax Rules, 1941.

Analysis: The exemption under rule 3(66a) is available only to a newly set up small-scale industry that does not use the trade mark or brand name of any product of an existing industrial unit. A literal reading would deny exemption for all products even where the brand name is used only for a portion of the manufacture. Having regard to the object of the rule, the exclusion was confined to the goods on which the existing unit's trade mark or brand name is used. The manufacturer bears the burden of proving that particular goods do not use such brand name or trade mark.

Conclusion: The assessee was not entitled to exemption for the goods marketed under the existing industrial unit's brand name, but was entitled to exemption for the remaining goods not using that brand name.

Final Conclusion: The appeal succeeded and the Tribunal's order was set aside, with the exemption restricted only to goods not carrying the existing unit's brand name.

Ratio Decidendi: Where an exemption provision excludes units using another's brand name or trade mark, the exclusion applies only to the goods on which such brand name or trade mark is actually used, and the assessee must prove non-use for the goods claimed to be exempt.

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