SSI exemption and brand name use: goods made for customer use, not trade, need not lose exemption despite the customer's logo.

SSI exemption under Notification No. 8/2003-C.E. cannot be denied merely because goods bear the customer's logo; the decisive test is whether the mark indicates a connection in the course of trade between the goods and the brand user. Where diaries were manufactured on job work for LIC, with LIC supplying principal raw materials and not trading the diaries, the brand-name objection did not apply. The circular on the SSI scheme likewise states that branded goods supplied to a customer for further use, and not otherwise traded, should not lose exemption merely for bearing the customer's brand or logo. The assessee was therefore entitled to the exemption.

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Issues: Whether the assessee was entitled to small-scale industry exemption under Notification No. 8/2003-C.E. when the diaries manufactured on job work basis bore the logo of LIC and were supplied to LIC without evidence of trade by LIC.

Analysis: The decisive requirement for denying the exemption on the ground of brand name is that the mark must indicate a connection in the course of trade between the goods and the person using the brand name. The record showed that the diaries were manufactured for LIC on job work basis, that LIC supplied the principal raw materials, and that the diaries were not traded by LIC. The circular clarifying the SSI scheme also states that where branded goods are supplied to the customer for further use and are not otherwise traded, exemption should not be denied merely because they bear the customer's brand or logo.

Conclusion: The assessee was entitled to SSI exemption under Notification No. 8/2003-C.E. read with Circular No. 71/71/94-CX dated 27.10.1994.

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