SSI exemption and show cause notice limits prevent denial based on unrelated brand use or new allegations.

SSI exemption could not be denied merely because the assessee used another person's brand name on cakes and pastries where that other person did not manufacture or market those goods, since the use was on a different class of products and did not amount to use of another's brand name for the relevant exempted goods; the denial was unsustainable. A demand also could not be upheld on a fresh ground, namely that the brand related to a foreign company, when that allegation was not stated in the show cause notice; the demand on that basis failed. The assessee was therefore held entitled to the exemption and the impugned order was set aside.

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Issues: (i) Whether SSI exemption could be denied on the ground that the assessee used the brand name of another person on goods not manufactured or marketed by that person. (ii) Whether the demand could be sustained on a new ground not alleged in the show cause notice.

Issue (i): Whether SSI exemption could be denied on the ground that the assessee used the brand name of another person on goods not manufactured or marketed by that person.

Analysis: The assessee used the brand name on cakes and pastries, while the other concern was not manufacturing those goods and was not using the brand on those products. The use was thus on a different class of goods, and the cited rulings and Board circulars supported the view that such use did not amount to use of another person's brand name for the relevant exempted goods so as to disentitle SSI relief.

Conclusion: The denial of SSI exemption on this ground was not sustainable and was in favour of the assessee.

Issue (ii): Whether the demand could be sustained on a new ground not alleged in the show cause notice.

Analysis: The order of denial proceeded on an additional allegation that the brand related to a foreign company, but that ground had not been set out in the show cause notice. A demand cannot be upheld on a basis materially different from the one originally proposed in the notice.

Conclusion: The demand could not be sustained on the new ground and this issue was also in favour of the assessee.

Final Conclusion: The assessee was held entitled to the benefit of the exemption, and the impugned order was set aside.

Ratio Decidendi: SSI exemption cannot be denied merely because a brand name is used on goods not manufactured or marketed by the other person, and an adverse order cannot be sustained on a ground not proposed in the show cause notice.

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