Exclusive brand-name licence can qualify as assignment for SSI exemption, defeating denial of benefit and limitation challenge.

An exclusive right to use a foreign company's brand name in India can amount to an assignment for SSI exemption purposes, even if the foreign owner retains title and the instrument is unregistered. On that basis, clearances made under the assigned brand name were not disqualified from the benefit under Notifications No. 9/98-C.E. and No. 9/99-C.E., so the denial of small-scale industry exemption failed. Once the exemption issue was resolved in favour of the assessee, the associated allegation of suppression of facts for invoking the extended limitation period also did not survive, and the demand and penalties were unsustainable.

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Issues: Whether the respondents were entitled to small-scale industry exemption under Notifications No. 9/98-C.E. and No. 9/99-C.E. for goods cleared under the brand name of a foreign company, and whether the extended period of limitation was invocable.

Analysis: The agreement granted the respondents the exclusive right to use the trade mark/brand name in India, while the foreign company retained ownership. For the purpose of SSI notifications, such grant was treated as an assignment of the brand name. The fact that the assignment was not registered or that ownership remained with the foreign company did not defeat the exemption. Since the branded goods were cleared under an assigned brand name, the substantive basis for denial of SSI benefit failed. In view of that conclusion, the challenge to limitation based on suppression of facts also could not succeed.

Conclusion: The respondents were entitled to SSI benefit under the notifications, and the Revenue's challenge to the demand and penalties failed.

Ratio Decidendi: For SSI exemption, an exclusive right to use a brand name in India granted by the owner can amount to an assignment even if the owner retains title and the instrument is unregistered.

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