Territorial brand use under prior assignment preserved SSI exemption despite later trademark registration.

A brand name used under an earlier assignment and family settlement in a specified territory did not defeat small scale industries exemption merely because formal trademark registration came later. The record showed long-standing territorial use of the mark, with the assessee entitled to use BONNE in its allotted area from 1990 onwards. The later registration in 2004 was treated as reflecting that pre-existing entitlement, and use within the assigned territory was not considered use of another person's brand name for SSI purposes.

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Issues: Whether the assessee was entitled to claim small scale industries exemption on clearances made under the brand name BONNE, despite the formal registration of the trade mark in its favour taking effect only from 27.04.2004.

Analysis: The record showed a long-standing trade history of the brand name, a family settlement allocating territorial use of the mark, and an assignment in favour of the assessee from 1990 onwards. The subsequent registration obtained in 2004 was treated as reflecting the pre-existing entitlement arising from the earlier assignment and territorial arrangement. The fact that another branch of the family had also been permitted to use the same mark in its allotted territories supported the position that use of the brand name in the assessee's assigned territory did not disentitle it from SSI exemption.

Conclusion: The assessee was entitled to use the brand name in its assigned territory from 1990 onwards and was not to be denied SSI exemption on the ground that the brand name belonged to some other person.

Ratio Decidendi: Where the right to use a brand name in a specified territory is established by assignment and family settlement, subsequent formal registration does not defeat eligibility for small scale industries exemption for use within that territory.

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