Bona fide belief on disputed brand name defeated penalty under SSI exemption, leading to setting aside of the penalty.

Penalty was held unwarranted where goods were cleared under a disputed mark and the assessee acted under a bona fide belief that the mark was not a brand name for SSI exemption. The word had been used as a family concern prefix, supporting the view that the conduct was not deliberate or contumacious. On that basis, the penalty alone was set aside, while the duty demand itself was not in dispute.

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Issues: Whether penalty was imposable where the assessee cleared goods bearing a disputed mark under a bona fide belief that the mark was not a brand name for the purpose of SSI exemption.

Analysis: The appeal concerned only the penalty of Rs. 15,000, while the duty demand itself was not disputed. The explanation accepted was that the word used on the goods had long been employed as a prefix in family concerns and that the assessee believed it was not a brand name. On that basis, the conduct was treated as bona fide and the case was found unsuitable for penalty.

Conclusion: Penalty was set aside and the assessee succeeded on that issue.

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