Brand-name clearances excluded from prior-year turnover under exemption rules, supporting small-scale exemption eligibility.

Clearances of goods bearing another person's brand name, though ineligible for exemption under the notification, were excluded from the previous financial year's aggregate value for small-scale exemption eligibility because para 3A expressly removed such branded clearances where para 4 denied exemption. Para 3 governed exclusion for the current financial year's slab-based duty table, but para 3A controlled the computation of prior-year turnover. On that footing, the prior-year branded clearances were not includible in aggregate turnover, and the assessee was treated as having a prima facie case for exemption eligibility in the subsequent year, leading to waiver of pre-deposit and stay of recovery at the interim stage.

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Issues: Whether clearances of goods bearing the brand name of another person, though ineligible for exemption under the notification, were liable to be excluded while computing the aggregate value of clearances for the previous financial year for determining eligibility to the small-scale exemption.

Analysis: Para 3 of the notification governed exclusion of clearances for the financial year commencing on 1-4-2003 for purposes of the slab-based duty table, whereas para 3A governed exclusion of clearances for the previous financial year for computing aggregate value. Clause (b) of para 3A specifically excluded clearances bearing the brand name or trade name of another person, where such clearances were ineligible for exemption under para 4. The branded goods in question were admitted to be ineligible for exemption under para 4, and therefore their clearances for the previous year were not to be included in the aggregate turnover computation.

Conclusion: The assessee made out a prima facie case that the previous year's clearances of the branded goods were excludible from the aggregate value, with the result that eligibility for the exemption in the subsequent year was established at the interim stage, and pre-deposit was waived with stay of recovery.

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