Brand name bar on captive-use goods does not deny small scale exemption where branded inputs are wholly consumed by the buyer.

Branded narrow woven elastic tapes made to the buyer's specifications and supplied exclusively to the brand owner for use in further manufacture were treated as eligible for small scale exemption. The brand name bar was held inapplicable because the record showed no trading of the goods in the open market and the branded goods were wholly consumed by the brand owner in manufacture of the final product. Relying on the Board's circular, the appellate authority found no evidence to contradict these facts, so the exemption was rightly allowed and the Revenue failed to dislodge it.

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Issues: Whether branded narrow woven elastic tapes, manufactured to the buyer's specifications and used exclusively by the brand owner in further manufacture, were eligible for small scale exemption and whether the brand name bar could be invoked to deny the exemption.

Analysis: The goods were manufactured for the buyer's brand, supplied only to that buyer, and were shown to be consumed by the buyer in manufacture of the final product. The record did not show any trading of the branded goods in the open market. The appellate authority relied on the Board's circular clarifying that the brand name condition would not operate to deny exemption where the branded goods are not traded and are wholly consumed by the brand owner. The Revenue also failed to place any evidence contradicting the factual finding or dislodge the supporting material produced by the buyer.

Conclusion: The brand name condition was not attracted to deny small scale exemption, and the exemption was rightly allowed in favour of the assessee.

Final Conclusion: The Revenue failed to establish any ground to disturb the grant of exemption, and the appeal was not sustainable.

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