Brand name use by a sister concern defeats small scale exemption; duty upheld, but penalty was reduced.

Use of another concern's brand name bars small scale exemption under Notification No. 1/93-C.E. where the assessee admits such use and the record is corroborated by the other concern's statement. On those facts, the exemption claim could not be sustained and the duty liability remained confirmed. The penalty was considered excessive on the circumstances and was reduced to Rs. 7,500, while the substantive demand was left intact.

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Issues: (i) Whether the appellant was entitled to the benefit of Notification No. 1/93-C.E. despite using the brand name of another concern; (ii) whether the penalty required interference.

Issue (i): Whether the appellant was entitled to the benefit of Notification No. 1/93-C.E. despite using the brand name of another concern.

Analysis: The relevant statements on record showed that the appellant and the other unit were sister concerns and that the brand name "Katari" belonged to the other concern. The appellant's managing partner admitted use of that brand name for manufacture and marketing, and this was corroborated by the statement of the other concern's managing partner. In these circumstances, the use of the brand name attracted the bar under the notification and the claim to small scale exemption could not be sustained.

Conclusion: The denial of the benefit of Notification No. 1/93-C.E. was upheld and the duty demand was sustained, in favour of Revenue.

Issue (ii): Whether the penalty required interference.

Analysis: On the facts and circumstances, the Tribunal considered that the penalty imposed was excessive and warranted reduction, while the duty liability itself remained confirmed.

Conclusion: The penalty was reduced to Rs. 7,500, in favour of the appellant.

Final Conclusion: The appeal failed on the principal question of eligibility to small scale exemption and duty liability, but succeeded to the limited extent of reduction in penalty.

Ratio Decidendi: Where an assessee admits use of another concern's brand name, supported by corroborative statements, the small scale exemption under the notification is unavailable.

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