Brand name use defeats small scale exemption; extended limitation fails without suppression, and penalty was set aside on remand.

Use of another person's brand name disentitles a unit from the small scale industry exemption, and the fact that the branded goods were different from those made by the brand owner does not restore eligibility. The extended period of limitation could not be applied for the full demand because the brand use was not disclosed, but the classification list had been approved and there was no material of positive suppression or comparable culpable conduct; only the demand for March 1995 survived. As only part of the demand remained, the duty was remitted for recomputation for that period, while the penalty and confiscation were set aside.

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Issues: (i) Whether the appellants were entitled to small scale industry exemption despite using another person's brand name on the goods; (ii) whether the extended period of limitation could be invoked on the facts; (iii) whether the duty demand, penalty and confiscation required interference and whether the matter had to be remanded for reworking of duty.

Issue (i): Whether the appellants were entitled to small scale industry exemption despite using another person's brand name on the goods.

Analysis: The exemption under the relevant notification was unavailable where the goods bore a brand name belonging to another person. The Tribunal applied the settled legal position on use of another's brand name and held that the fact that the branded goods were of a different kind from those manufactured by the brand owner did not alter the ineligibility for exemption.

Conclusion: The issue was decided against the assessee.

Issue (ii): Whether the extended period of limitation could be invoked on the facts.

Analysis: The brand name usage had not been disclosed, but the classification list had already been approved by the proper officer. In the absence of material showing a positive act of suppression or other conduct justifying the longer period, the Tribunal held that the extended limitation could not be sustained for the entire period and that only the demand relatable to March 1995 survived.

Conclusion: The issue was decided partly in favour of the assessee and partly in favour of Revenue.

Issue (iii): Whether the duty demand, penalty and confiscation required interference and whether the matter had to be remanded for reworking of duty.

Analysis: Since only part of the demand was upheld, the duty required re-determination for the surviving period. On that basis, the Tribunal set aside the penalty and confiscation, and remitted the matter to the lower appellate authority to rework the duty liability for March 1995.

Conclusion: The demand was remanded for re-determination and the penalty and confiscation were set aside.

Final Conclusion: The exemption denial was sustained, the invocation of the extended period was rejected except for the surviving month, and the duty, penalty and confiscation were modified accordingly with a remand for recomputation.

Ratio Decidendi: Use of another person's brand name disentitles a unit from the small scale industry exemption, but extended limitation requires material showing suppression or comparable culpable conduct, especially where the classification position had been approved by the department.

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