Brand-name clearances stayed outside exemption computation, while full disclosure in returns defeated extended limitation.

Goods bearing another person's brand name remained outside the aggregate value of clearances under the exemption notifications, because the notifications expressly denied benefit to such goods and excluded those clearances from computation even where the goods were cleared for captive use or were not sold in the market. Applying strict construction of exemption notifications, the branded clearances to CTU and DTC were held not includable, and the substantive exemption issue was decided for the assessee. The extended period of limitation was also unavailable because the relevant clearances had been regularly disclosed in returns and duty had been paid at the higher rate, so the demand was time-barred. Demand, interest and penalty could not be sustained.

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Issues: (i) Whether clearances of goods bearing the brand name or trade name of another person were excludable from the aggregate value of clearances for purposes of Notifications No. 9/2002-CE and No. 9/2003-CE; (ii) whether the show cause notice was barred by limitation.

Issue (i): Whether clearances of goods bearing the brand name or trade name of another person were excludable from the aggregate value of clearances for purposes of Notifications No. 9/2002-CE and No. 9/2003-CE.

Analysis: The exemption notifications denied the benefit to specified goods bearing the brand name or trade name of another person, and also excluded such clearances from the aggregate value computation. The goods cleared to CTU and DTC bore marks identifying another person, and the fact that they were cleared at a normal rate of duty or were not sold in the market did not take them outside the exclusion. The settled principle applied was that exemption notifications must be strictly construed according to their terms, and no exception could be implied merely because the branded goods were for captive use or not marketed.

Conclusion: The clearances to CTU and DTC were not includable in the aggregate value of clearances, and the issue was decided in favour of the assessee.

Issue (ii): Whether the show cause notice was barred by limitation.

Analysis: The appellant had been regularly filing returns showing the relevant clearances and paying duty at the higher rate on the said goods, placing the activity within the knowledge of the department. In such circumstances, invocation of the extended period of limitation was not justified.

Conclusion: The demand was time-barred, and the issue was decided in favour of the assessee.

Final Conclusion: The demand, interest and penalty could not be sustained either on merits or on limitation, and the appeal succeeded with consequential relief.

Ratio Decidendi: Goods bearing the brand name or trade name of another person remain excluded by the exemption notification even if cleared for captive use or not marketed, and the extended limitation period cannot be invoked where the relevant clearances are already within the department's knowledge through regular returns.

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