SSI exemption for unbranded goods upheld where no direct nexus with branded products was proved under the notification's exclusion clause.

Unbranded goods manufactured and cleared independently were held eligible for SSI exemption under Notification No. 175/86, because the record did not show a direct nexus with branded goods. Caps, rings, lids and jar-bases were found to have been produced and removed separately from goods bearing the brand name "Rallimix". Mere use of such unbranded items in relation to branded products was insufficient to attract the exclusion in para 7 of the notification. In the absence of cogent evidence connecting the unbranded goods to the branded goods, the appellate finding that they fell outside the exclusion was accepted, and the Revenue's challenge failed.

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Issues: Whether the respondents were entitled to the benefit of SSI Exemption Notification No. 175/86 dated 1-3-1986 in respect of unbranded goods manufactured and cleared by them.

Analysis: The unbranded goods, such as caps, rings, lids and jar-bases, were found to have been manufactured and cleared independently and not along with the branded goods bearing the brand name "Rallimix". The record did not support the Revenue's contention that mere use of such goods in relation to branded products brought them within the mischief of para 7 of the exemption notification. In the absence of any cogent material showing a direct nexus with the branded goods, the finding of the appellate authority that the unbranded goods were outside the exclusion in para 7 was accepted.

Conclusion: The respondents were held entitled to the SSI exemption for the unbranded goods, and the Revenue's challenge failed.

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