Small scale exemption remains available when branded components are supplied only for further manufacture, not traded as such.

Small scale industry exemption under Notification No. 175/86-C.E. could not be denied merely because porcelain insulated blanks bore another unit's brand name, where the blanks were supplied only as components for further manufacture into electrical fuses and were not sold in the market as such. The factual finding that the goods were not cleared as traded branded goods remained unrebutted, so the brand name was not used in the course of trade for the goods themselves. The demand was therefore not sustainable.

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Issues: Whether the benefit of small scale industry exemption under Notification No. 175/86-C.E. could be denied to goods bearing another unit's brand name when such goods were supplied only as components for further manufacture and were not traded as such.

Analysis: The respondents manufactured porcelain insulated blanks and supplied them to the brand name holder for further processing into electrical fuses. There was no finding that the blanks were cleared as such in the market, and the factual finding that they were only components of the final product remained unrebutted. In such circumstances, the brand name was not used in the course of trade for the branded goods themselves, and the Larger Bench principle relied upon by the Tribunal applied.

Conclusion: The exemption could not be denied on the sole ground that the goods bore the brand name of another unit, and the demand was not sustainable.

Ratio Decidendi: Where branded goods are supplied only as components for further manufacture and are not traded as such, the use of another unit's brand name is not in the course of trade so as to forfeit small scale exemption.

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