SSI exemption and brand name ownership: dissolved partnership could not be treated as the owner of the trade name.

Small-scale exemption under Notification No. 175/86-C.E. and Notification No. 1/93-C.E. was unavailable only where the goods bore the brand name or trade name of another person who was not eligible for the exemption. On the facts, the brand name "Bentex" was not shown to belong to another person after dissolution of the partnership, because the firm had ceased to exist and the subsequent agreement indicated shared use among the partners. The continued trade-mark registration in the dissolved firm's name was not decisive. The revenue therefore failed to establish that the assessees used another person's brand name, and denial of SSI exemption on that basis was not sustainable.

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Issues: Whether the goods manufactured and cleared by the appellants were disentitled to the small-scale exemption on the ground that they bore the brand name or trade name of another person.

Analysis: The exemption under Notification No. 175/86-C.E. and its successor Notification No. 1/93-C.E. was unavailable only where the specified goods were affixed with the brand name or trade name of another person who was not eligible for the exemption. The decisive question was whether "Bentex" continued to belong to M/s. Chopra Electrical Sales Corporation after the partnership stood dissolved. On the facts, the firm had ceased to exist on dissolution, and a non-existent partnership could not remain the owner of the brand name merely because the trade-mark registration continued in its name for some time. The agreement among the partners after dissolution also showed that the brand name was to belong to all the partners and could be used by each of them. The legal position under the Partnership Act supported the view that upon dissolution the firm ceases to exist and its property, including goodwill, is dealt with among the partners. The revenue therefore failed to establish that the brand name belonged to "another person" within the meaning of the notifications.

Conclusion: The denial of SSI exemption on the ground of use of another person's brand name was unsustainable and the issue was decided in favour of the assessees.

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