SSI exemption denied for use of another's brand name; duty demand and penalty sustained under the excise notification bar.

SSI exemption under Notification No. 175/86-C.E. was unavailable where the assessee cleared goods under a brand name belonging to another concern. Mere purchase of plant and machinery capable of embossing the brand name did not amount to transfer of ownership of that brand name, and the absence of any agreement, deed of assignment, or other documentary proof was decisive. Claimed royalty payments did not establish proprietary rights; they were consistent only with use of another's brand. The bar in para 7 of the notification therefore applied, making the duty demand under the Central Excise Act and Rules sustainable. Penalty was also upheld for the contravention, and the extended period of limitation was not disputed.

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Issues: Whether the appellants were entitled to exemption under Notification No. 175/86-C.E. despite clearing goods under a brand name belonging to another concern, and whether duty demand and penalty were sustainable.

Analysis: The appellants had purchased plant and machinery, but there was no agreement, deed of assignment, or other documentary proof transferring ownership of the brand name to them. Mere purchase of machinery capable of embossing the brand name did not establish acquisition of the brand name itself. The claimed payment of royalty did not prove ownership, and in any event royalty payments are consistent only with use of another's brand name. On these facts, the bar in para 7 of the notification applied, disentitling the appellants to SSI exemption. Since the exemption was unavailable, the duty demand under the Central Excise Act and Rules was justified, and penalty was also warranted for contravention. The appellants did not dispute the extended period of limitation.

Conclusion: The appellants were not entitled to the exemption, and the duty demand and penalty were upheld against them.

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