Brand name use by another person defeats SSI exemption where the mark links goods to the foreign trade mark owner.

Goods bearing a foreign company's brand name or trade name were held ineligible for small scale industry exemption under Notification No. 175/86 because the mark used on the goods linked them with that company. The deciding factor was whether the assessee used another person's brand name or trade name on the goods; the record showed that "IRD" and "Mechanalysis" were trade marks of the foreign company, so clause 7 of the notification applied. The plea that the mark was merely a house mark was rejected because the agreement itself described the expressions as the foreign company's trade marks. The exemption was denied.

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Issues: Whether goods manufactured and cleared bearing the foreign company's brand name or trade name were entitled to small scale industry exemption under Notification No. 175/86.

Analysis: The goods were cleared with the mark "IRD Mechanalysis", and the record showed that "IRD" and "Mechanalysis" were trade marks of the foreign company. For the purpose of the exemption, the material consideration was whether the assessee used the brand name or trade name of another person on the goods, thereby linking the goods with that other person. Since the use of the mark connected the appellant's goods with the foreign company's goods, the bar in clause 7 of the notification applied. The plea that the mark was only a house mark was rejected because the agreement itself described the expressions as trade marks of the foreign company.

Conclusion: The goods were not eligible for SSI exemption under Notification No. 175/86 and the denial of benefit was upheld against the assessee.

Ratio Decidendi: Goods bearing a foreign person's brand name or trade name are ineligible for small scale exemption where the mark links the goods with that other person for the purpose of the notification.

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