SSI exemption exclusion for goods bearing another person's brand name applies strictly where ownership is not proved

Specified goods cleared under a brand name registered in another person's name are excluded from SSI exemption under the amended Notification No. 1/93-C.E. The assessee's reliance on a mutual agreement and civil decree did not establish ownership or an assignment of the mark, because the materials showed only a limited territorial permission to use the brand and no irrevocable transfer of rights. The exclusion in para 4, inserted from 1-4-1994, must be strictly construed, and once the goods were found to bear another person's brand name, the exemption was unavailable.

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Issues: Whether goods cleared by the respondents under brand names registered in the name of another person were excluded from SSI exemption under the amended notification.

Analysis: The exemption available under Notification No. 1/93-C.E. was withdrawn, by para 4 inserted with effect from 1-4-1994, in respect of specified goods bearing the brand name or trade name of another person. The respondents relied on a mutual agreement and a civil court decree to claim co-ownership or an independent right to use the marks in their respective territories. However, the brand names stood registered in the sole name of Shri K.P.R. Sakthivel during the relevant periods, the agreement showed only permission to use the marks within allotted areas, and there was no proof of assignment or irrevocable transfer of ownership to the respondents. The civil decree conferred only a territorial right to use and did not declare ownership. The exclusion in para 4 was required to be strictly construed, and once the Revenue established that the goods were cleared under the brand name of another person, the exemption could not be availed.

Conclusion: The goods cleared by the respondents were covered by the exclusion in para 4 of the amended notification and were not eligible for SSI exemption.

Ratio Decidendi: Where specified goods are cleared under a brand name or trade name registered in the name of another person, and the assessee cannot prove ownership or assignment of that mark, the exemption under the SSI notification is unavailable and the exclusion must be applied strictly.

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