Brand-name exclusion under small-scale exemption does not apply when marks were supplier-affixed and goods were used as component parts.

Notification No. 175/86 was treated as available where the brand name or logo had already been affixed by the supplier before the goods were received by the manufacturer, because paragraph 7 barred exemption only when the manufacturer affixed another person's brand name. The goods were also cleared as component parts for use in manufacturing push button telephones, not sold in the market as traded goods. On those facts, the brand-name exclusion did not apply, and the proviso for component parts used as original equipment supported exemption. The denial of the small-scale exemption was therefore unsustainable on the stated facts.

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Issues: Whether the benefit of Notification No. 175/86 was available when the brand name on the goods had been affixed by the supplier before receipt by the manufacturer, and the goods were cleared as component parts for use in manufacture of final equipment without trade in the goods themselves.

Analysis: Paragraph 7 of the notification denies exemption where the manufacturer affixes the brand name or trade name of another person. On the facts found, the brand name/logo was already embossed on the bare assemblies when received by the appellants and was not affixed by them. The goods were also not sold in the market but were supplied for use in the manufacture of push button telephones. In such circumstances, the exclusion in paragraph 7 was held not to apply, following the earlier Tribunal view that the mischief is not attracted where the brand mark is not affixed by the manufacturer and where there is no trading connection in the course of trade. The proviso relating to component parts used as original equipment also supported the appellants' claim to exemption.

Conclusion: The benefit of Notification No. 175/86 was held to be available to the appellants, and the denial of exemption was unsustainable.

Ratio Decidendi: Exemption under the small-scale notification is not denied by the brand-name bar when the brand name was already affixed by the supplier before receipt by the assessee and the goods were cleared as component parts for captive use without sale in trade.

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