Independent manufacturing unit test defeats dummy entity allegation where brand use and inter-company dealings were not enough.

Telstar was found to be a genuine and separate manufacturing unit, not a dummy or camouflage for Meteor. The mere fact that some partners of Telstar were also directors of Meteor did not establish that the firm was a facade, because the two entities remained distinct legal persons. Use of Meteor's brand name was not conclusive, and sales of pistons, supply of machinery, or supply of raw material were insufficient to show manufacture by or on behalf of Meteor absent evidence of financial control, supervision, or profit flow-back. The transactions were treated as principal-to-principal.

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Issues: Whether Telstar was merely a dummy or camouflage for Meteor so that the pistons manufactured at Telstar's factory were goods manufactured by or on behalf of Meteor, disentitling Telstar to the benefit of the exemption and licensing notifications.

Analysis: The decisive question was whether the two units were genuinely independent or whether the arrangement between them was a device to shift manufacture to a different legal entity. The fact that three partners of Telstar were also directors of Meteor did not by itself establish that Telstar was a facade, since a public limited company and a partnership firm are distinct legal persons. The use of Meteor's brand name was also not conclusive, because brand name use alone does not make the user an agent of the brand owner. Sales by Telstar to Meteor, supply of machinery, and any supply of raw material were treated as insufficient, in the absence of evidence of financial involvement, control, supervision, or flow-back of profits from Telstar to Meteor. The transactions were held to be on a principal-to-principal basis.

Conclusion: Telstar was not a dummy or camouflage for Meteor, and the pistons manufactured at Telstar's factory were not manufactured by or on behalf of Meteor.

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