SSI exemption and foreign collaborator name use: paid technical collaboration can preserve exemption where brand use is authorised.

Use of a foreign collaborator's name on products under a paid technical collaboration agreement does not, by itself, amount to unauthorised adoption of another's brand name for SSI exemption purposes. Where consideration was paid for technical know-how and use of the collaborator's name in India, and the agreement did not prohibit such use after expiry, mere reliance on the foreign name was insufficient to deny the exemption. The denial of small scale industry exemption was therefore unsustainable, and the assessee remained entitled to the benefit of the notifications.

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Issues: Whether the assessee was disentitled to Small Scale Industry exemption for use of the foreign collaborator's name "BKW" on the products, despite payment of consideration under a technical collaboration agreement.

Analysis: The assessee had paid valuable consideration under the technical collaboration agreement for transfer of technical know-how and for use of the collaborator's name in India. The use of "BKW" was therefore not a case of unauthorised adoption of another person's brand name. On the facts, the authorities' reliance on mere use of the foreign name was insufficient to deny the exemption, particularly where the agreement did not contain a prohibitory clause disabling such use after expiry and the arrangement was supported by consideration.

Conclusion: The denial of SSI exemption was unsustainable and the assessee was entitled to the benefit of the notifications.

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