Brand name clearances excluded from small scale exemption turnover; demand also prima facie time-barred, so stay was granted.

Clearances of goods bearing another person's brand name were excluded from the aggregate value for small scale exemption eligibility because Notification No. 8/2003-C.E. expressly excluded branded clearances that were ineligible under paragraph 4; the fact that such goods may have been exempt under another notification did not change that computation. The assessee therefore had a prima facie case on merits. The demand was also prima facie time-barred, as the notice was issued well after the relevant period and the department's prior notice showed knowledge of the facts, making the extended period unavailable. On both grounds, pre-deposit was waived and stay was granted.

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Issues: (i) Whether clearances of goods manufactured with the brand name or trade name of another person were to be included while computing the aggregate value of clearances for eligibility under the small scale exemption notification. (ii) Whether the demand was prima facie barred by limitation for the relevant periods.

Issue (i): Whether clearances of goods manufactured with the brand name or trade name of another person were to be included while computing the aggregate value of clearances for eligibility under the small scale exemption notification.

Analysis: Paragraph 2(vii) of Notification No. 8/2003-C.E. denied the exemption where the aggregate value of clearances exceeded the prescribed limit in the preceding financial year. Paragraph 3A(b) expressly excluded from computation only those branded clearances which were not eligible for the exemption under paragraph 4. Since goods bearing another person's brand name were themselves ineligible under paragraph 4, their clearances were not to be taken into account for computing the threshold. The fact that such goods may have been exempt under another notification did not alter the express language of paragraph 3A(b).

Conclusion: The branded clearances were not includible in the aggregate turnover computation, and the assessee succeeded on this issue.

Issue (ii): Whether the demand was prima facie barred by limitation for the relevant periods.

Analysis: The larger demand related to a period ending in December 2007 and the show cause notice was issued in August 2009. The Tribunal also noted that another notice had already been issued earlier for the subsequent period, showing departmental knowledge of the facts. On that basis, the extended period was not prima facie available.

Conclusion: The demand was held prima facie to be barred by limitation.

Final Conclusion: The assessee established a prima facie case both on merits and on limitation, and the pre-deposit requirement was waived, resulting in grant of stay.

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