SSI exemption and brand-name clearances: goods bearing another's trade mark were excluded from turnover aggregation for the threshold.

Under SSI exemption Notification No. 1/93, goods manufactured for another person and cleared under that person's brand name or trade name were excluded from the exemption scheme, because the decisive test was whether the goods bore another's brand mark, not who physically affixed it. Initials or marks used to identify a trade connection with another person were treated as branded goods, and an amendment substituting "bearing" for "affixing" confirmed that physical application of the mark was immaterial. Accordingly, the value of such branded clearances could not be included in the assessee's aggregate turnover for the exemption threshold, and the SSI benefit remained available.

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Issues: Whether, for claiming small-scale industry exemption under Notification No. 1/93, the value of goods manufactured for other persons and cleared under their brand names was liable to be included in the aggregate value of clearances for the preceding financial year.

Analysis: The notification denied exemption to specified goods bearing the brand name or trade name of another person, except in the specified cases. The expression "brand name or trade name" covered any name or mark used to indicate a connection in the course of trade between the goods and another person. Goods manufactured for automobile companies and cleared under their initials or marks were thus branded goods of another person, and the circumstance that the marks were initials or that the other party later affixed its full trade mark was immaterial. The earlier amendment substituting "bearing" for "affixing" made it clear that the decisive factor was whether the goods bore another person's brand name, not who physically affixed it. Such goods were therefore outside the exemption and their value could not be clubbed while computing the turnover limit.

Conclusion: The value of goods cleared for other persons under their brand names could not be included in the aggregate value of clearances, and the assessee was entitled to the SSI exemption.

Final Conclusion: The denial of exemption was unsustainable, and the assessee succeeded in obtaining the benefit of the notification for the relevant year.

Ratio Decidendi: For SSI exemption notifications excluding goods bearing another person's brand name or trade name, goods manufactured for and cleared under such brand names are not to be counted in the assessee's turnover for the exemption threshold, and the physical affixation of the mark by the manufacturer is not .

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