Small Scale Industry exemption and brand-name ownership support waiver of pre-deposit and stay of recovery

Use of a brand name not owned by any particular person was treated as not automatically defeating the Small Scale Industry exemption under Notification No. 1/93-C.E., and Circular No. 52/52/94-CX was relied on to support that position. The record also noted that brand ownership had not been verified from the purchasers and that part of the disputed amount had already been deposited during investigation. On that basis, a prima facie case was found for complete waiver of the remaining pre-deposit, and recovery was stayed pending disposal of the appeals.

---

---

Issues: Whether the applicants were entitled to complete waiver of pre-deposit and stay of recovery pending appeal on the basis that the brand name used on the goods was not owned by any particular person and, therefore, the Small Scale Industry exemption remained available.

Analysis: The demand arose from clearance of branded goods on the footing that the goods were ineligible for the Small Scale Industry exemption. Reliance was placed on Circular No. 52/52/94-CX dated 01-09-1994, which clarified, after opinion of the Ministry of Law, that where a brand name is not owned by any particular person, its use does not deprive a unit of the benefit of the small scale exemption scheme and that this position applied to goods covered by Notification No. 1/93-C.E. The record indicated that the brand ownership question had not been verified from the purchasers, and the applicants had already deposited part of the amount during investigation. On that material, a prima facie case for complete waiver was found.

Conclusion: The applicants were entitled to waiver of the balance duty and penalty pre-deposit, and recovery was stayed until disposal of the appeals.

---