Trade name disqualification under exemption notification upheld for stylised ARK mark; eligibility and limitation issues remanded.

A stylised ARK mark used on cartons and in advertisements was treated as a trade name of another person because the surrounding material showed a trade connection with Arksan Pvt. Ltd.; use on cartons rather than directly on goods did not avoid the exemption notification's disqualification. The Revenue was required to prove that the other person was not eligible for small-scale exemption, but that factual basis was not properly established on the record. Connected issues on the period of use of the mark and limitation were also left open for reconsideration. The adjudication was therefore set aside and the matter remanded for fresh determination after giving the assessee an opportunity to respond to the evidence.

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Issues: (i) Whether the stylised mark ARK affixed on cartons and in advertisements was a brand name or trade name of another person so as to attract the disqualification in the exemption notification; (ii) Whether the Revenue had discharged the burden of showing that the other person was not eligible to the small-scale exemption, and whether the related pleas on use of the mark and limitation required fresh determination.

Issue (i): Whether the stylised mark ARK affixed on cartons and in advertisements was a brand name or trade name of another person so as to attract the disqualification in the exemption notification.

Analysis: The exclusion in the exemption notification had to be read with the explanation defining brand name or trade name. A mark used in relation to specified goods to indicate a connection in the course of trade with a person could fall within the prohibition. On the material before it, including the advertising material and the circumstances in which the stylised logo was developed and used, the mark was found to have a trade connection with Arksan Pvt. Ltd. The fact that the mark appeared on cartons and not directly on the goods did not take it outside the mischief of the notification.

Conclusion: The stylised ARK was held to be the trade name of another person for the purpose of the notification, against the assessee.

Issue (ii): Whether the Revenue had discharged the burden of showing that the other person was not eligible to the small-scale exemption, and whether the related pleas on use of the mark and limitation required fresh determination.

Analysis: Where exclusion is carved out in an exemption notification, the burden lies on the Revenue to establish that the conditions of exclusion are met. The finding that the other person was ineligible to the exemption had not been properly established on the record. The Tribunal also found that the plea regarding the period from which the stylised mark was used, and the allied plea of time-bar, had not been definitively dealt with and required reconsideration on proper evidence.

Conclusion: The Revenue failed to discharge the burden on eligibility, and those connected factual and limitation issues were directed to be re-examined on remand.

Final Conclusion: The adjudication was set aside and the matter was sent back for a fresh decision on eligibility, disqualification, use of the mark, and limitation, after giving the assessee an opportunity to meet the evidence.

Ratio Decidendi: An exemption notification excluding goods affixed with another person's brand name must be construed with its explanation, but the Revenue carries the burden to establish the factual conditions for disqualification, and unresolved connected issues may warrant remand for de novo determination.

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