Brand name ownership in a marketing area protects small scale industry exemption where proprietary rights are established.

An assessee with proprietary rights over a brand name in its own marketing area is not treated as using a third-party brand name for denying small scale industry exemption. The Court noted that the family agreement and trade mark certificates showed the trade name and marks were intended to remain vested in the respective parties, with no royalty payable and use recognised within separate marketing areas. The Tribunal's finding that the brand belonged exclusively to another party was contrary to the record. On that basis, the assessee was held to be the legal owner of the brand name in its area and the exemption denial was unsustainable.

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Issues: Whether the assessee was disentitled to small scale industry exemption on the ground that it used a third-party brand name, and whether the trade mark "Kalimark" belonged to the assessee for use within its own marketing area.

Analysis: The mutual agreement between the family members showed that the trade name and trade marks were intended to remain vested in the parties concerned, including the assessee, and that their use was recognised within the respective marketing areas. The agreement also indicated that no royalty was payable and that the assessee had proprietary rights over the brand name in its area. The conclusion reached by the Tribunal that the brand name belonged exclusively to another party was contrary to the record. On the evidence of the trade mark certificates and the mutual agreement, the assessee was the legal owner of the brand name in its own marketing area and was not using a third-party brand name for the purpose of the exemption notification.

Conclusion: The denial of exemption was not sustainable, and the assessee was entitled to the benefit of the notification.

Ratio Decidendi: Where the assessee establishes proprietary rights over the brand name in its own marketing area, use of that brand name does not amount to use of a third-party brand for denying small scale industry exemption.

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