Small scale exemption and branded goods: supplying only a cassette casing did not justify denial of relief.

Mere supply of a component or casing used in branded goods does not, by itself, amount to manufacture of branded goods so as to deny small scale exemption under Notification No. 175/86. Because the respondent supplied only the plastic casing for pre-recorded audio cassettes and the casing was not shown to be traded in the market under the brand name "Universal", the facts did not establish manufacture of branded goods. The exemption was therefore available, and the demand, interest and penalty were unsustainable.

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Issues: Whether the respondent was disentitled to the benefit of small scale exemption under Notification No. 175/86 on the ground that the goods were manufactured with the brand name "Universal".

Analysis: The brand name owner had placed an order for pre-recorded audio cassettes, and the respondent supplied only the plastic casing used in the manufacture of those cassettes. The casing itself was not traded in the market under the brand name "Universal", and the facts did not establish that the respondent was manufacturing branded goods so as to attract denial of the exemption.

Conclusion: The respondent remained entitled to the exemption and the demand, interest, and penalty were not sustainable.

Final Conclusion: The appeal failed and the order granting relief to the respondent was sustained.

Ratio Decidendi: Mere supply of a component or casing used in branded goods does not, by itself, amount to manufacture of branded goods so as to deny small scale exemption.

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