Small scale exemption and clandestine removal require reliable proof; unexplained brand markings and loose papers were insufficient here.

Small scale exemption under Notification No. 1/93-C.E. was considered in relation to branded goods and alleged clandestine removal. The text states that the Revenue had the burden to prove use of another person's brand name; because ownership of the marks was not established and the respondent's claim that the markings were already present on imported components was unrebutted, the exemption was treated as available. It also states that clandestine removal cannot be inferred from two unsigned loose papers alone; without corroboration from records, procurement, manufacture, or clearance evidence, and in light of the retracted statement, the allegation was not sustainable.

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Issues: (i) whether the benefit of small scale exemption under Notification No. 1/93-C.E. was unavailable because the goods bore the brand names "SONU-I" and "LITTLE MASTER"; (ii) whether clandestine removal of radios was proved on the basis of two loose papers and the surrounding material.

Issue (i): whether the benefit of small scale exemption under Notification No. 1/93-C.E. was unavailable because the goods bore the brand names "SONU-I" and "LITTLE MASTER".

Analysis: The burden lay on the Revenue to establish that the respondents were using another person's brand name so as to attract the bar in the notification. The record did not show who owned the brand names, and the respondents' stand that the markings were already present on imported components and were not affixed by them remained unrebutted. The Board's circular also supported denial only where the brand name was used by the manufacturer, not where materials were supplied with the marks already on them.

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

Issue (ii): whether clandestine removal of radios was proved on the basis of two loose papers and the surrounding material.

Analysis: Clandestine manufacture and removal had to be proved by cogent corroborative evidence. The loose papers were unsigned and were not shown to have been recovered from the respondents' premises by the witnesses. There was no supporting evidence of raw material procurement, manufacture, or clandestine clearance. The retracted statement could not by itself sustain the charge.

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

Final Conclusion: The order granting relief to the respondents was upheld and the Revenue's challenge failed on both issues.

Ratio Decidendi: Where the department alleges use of another's brand name or clandestine removal, the burden is on the Revenue to prove the allegation by reliable and corroborative evidence; absent such proof, the assessee is entitled to the exemption and the benefit of doubt.

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