SSI exemption and cum-duty valuation: retrospective trade mark registration did not save the exemption, but duty had to be recomputed inclusively.

SSI exemption was denied because the assessee used the foreign collaborator's brand name and logo during the relevant period, and retrospective trade mark registration did not change the character of those clearances; the agreement showed only permitted use, not transfer of the mark. The deeming effect under trade marks law was confined to that statute and did not extend the SSI benefit. Duty was, however, required to be recomputed on a cum-duty basis because the sale documents did not separately show excise duty and no separate duty was collected from buyers. Partial relief was granted.

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Issues: (i) whether the assessee was entitled to SSI exemption despite using the brand name and logo of the foreign collaborator during the relevant period; (ii) whether the duty liability should be recomputed on a cum-duty basis.

Issue (i): Whether the assessee was entitled to SSI exemption despite using the brand name and logo of the foreign collaborator during the relevant period.

Analysis: SSI exemption is intended for units that do not enjoy the advantage of a brand name. Retrospective registration of the trade mark in the assessee's name did not alter the character of the clearances made during the relevant period. The agreement also did not establish a transfer of the trade mark to the assessee, but only permitted use of the collaborator's trade mark and logo. The deeming effect under the trade marks law was held to operate only within that statute and did not extend SSI exemption benefit for the disputed period.

Conclusion: The assessee was not entitled to SSI exemption for the relevant period.

Issue (ii): Whether the duty liability should be recomputed on a cum-duty basis.

Analysis: Since the sale documents did not show excise duty separately and no separate duty was collected from buyers, the amount realised had to be treated as inclusive of duty for recalculation of the liability.

Conclusion: The assessee was entitled to recomputation of duty on a cum-duty basis.

Final Conclusion: The denial of SSI exemption was sustained, but the duty demand was required to be recalculated on an inclusive-value basis, resulting in only partial relief to the assessee.

Ratio Decidendi: Retrospective trade mark registration does not confer SSI exemption for the period when the unit used another's brand name, and where duty has not been separately collected, assessment must be made on a cum-duty basis.

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