SSI exemption denied where goods bore another person's ineligible brand name, even under permission and for different goods.

Small scale industry exemption under Notification No. 175/86 was unavailable where goods were cleared under a brand name owned by another person who was not entitled to the exemption. Permission or agreement to use the mark did not transfer ownership, so the brand continued to belong to the original owner. The fact that the brand owner manufactured different goods did not alter the bar under Para 7 of the notification, as the governing Supreme Court ruling treated that distinction as irrelevant. The Revenue's objection was sustained and the exemption claim failed.

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Issues: Whether the respondents were entitled to small scale industry exemption under Notification No. 175/86 when the goods were cleared under a brand name owned by another person who was not eligible for the exemption, and whether the fact that the brand owner manufactured different goods made any difference.

Analysis: The use of a brand name by way of permission or agreement did not transfer ownership of the trade mark to the respondents. The ownership of the brand name continued to remain with the original owner, who was ineligible for the exemption. Under the exemption notification, Para 7 barred the benefit where the goods bore the brand name of another person not entitled to the exemption. The distinction that the brand owner manufactured different goods was held to be irrelevant in light of the governing Supreme Court ruling.

Conclusion: The respondents were not entitled to the SSI exemption, and the Revenue's objection was sustained.

Ratio Decidendi: SSI exemption is unavailable where goods are cleared under the brand name of another person who is ineligible for the exemption, even if the brand name is used under permission and even if the brand owner manufactures different goods.

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