Strict construction of brand-name exemption bars denial based only on documents, part numbers, or exclusive trademark use rights.

Small-scale exemption under the brand-name exclusion applies only when the specified goods themselves bear another person's brand or trade name; references on invoices, catalogues or other documents, and part or serial numbers used for manufacturing or assembly, do not satisfy that condition. The exclusion clause must be read strictly and cannot be expanded by implication. Where a licence grants exclusive territorial rights to use the trademark, the assessee is treated as using the mark in its own right, so it is not barred as using another person's brand name. On that reasoning, the exemption denial, demand and penalties were unsustainable.

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Issues: (i) Whether the small-scale exemption could be denied on the ground that the brand name was found only on invoices, catalogues, and other documents, or by reference to part or serial numbers on the products; (ii) Whether an assessee having exclusive rights to use the trademark under the licence arrangement could be treated as using the brand name of another person.

Issue (i): Whether the small-scale exemption could be denied on the ground that the brand name was found only on invoices, catalogues, and other documents, or by reference to part or serial numbers on the products.

Analysis: The exemption notification denied benefit only where the specified goods themselves bore the brand name or trade name of another person. Mere reference to the brand on sale documents did not satisfy that condition. A part number or drawing number used as an aid to manufacture or assembly could not be equated with a brand name. The exclusion clause was required to be construed on its plain language, and there was no room for intendment to enlarge it.

Conclusion: The denial of exemption on the basis of brand name appearing on documents or part numbers was unsustainable and was against the assessee.

Issue (ii): Whether an assessee having exclusive rights to use the trademark under the licence arrangement could be treated as using the brand name of another person.

Analysis: Where the agreement conferred exclusive rights to use the trademark in the relevant territory, the mark could not be regarded as that of another person for the purpose of the exemption bar. The arrangement placed the assessee in its own right as user of the mark, so the exclusion for another person's brand name did not apply.

Conclusion: The assessee could not be denied exemption on the footing that it used another person's trademark, and this issue was decided in favour of the assessee.

Final Conclusion: The demand and penalties could not be sustained under the exemption notifications on the reasoning adopted in the impugned order, and the appeals succeeded.

Ratio Decidendi: An exemption bar for goods bearing another person's brand name applies only when the specified goods themselves are affixed with that brand, and it cannot be expanded by implication to cover markings on documents, part numbers, or a mark used under an exclusive right in the assessee's own territory.

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