Brand name exemption for goods made to customer specifications was upheld where no trade use of the mark was shown.

Goods manufactured to a customer's specifications and supplied only to that customer for its own use were not treated as bearing another person's brand name in the course of trade. On that basis, small scale exemption under Notification No. 1/93-C.E. could not be denied, and the Chapter X procedure was not attracted on the facts discussed. The analysis also notes that where such goods are not marketed as branded goods and there is no trade connection in the relevant sense, use of the customer's mark does not defeat the exemption.

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Issues: Whether the goods manufactured and supplied to the customer for its own use bore a brand name or trade name of another person so as to deny small scale exemption under Notification No. 1/93-C.E.; and whether the requirement of Chapter X procedure arose on the facts of the case.

Analysis: Para 4 of Notification No. 1/93-C.E. denies exemption only where the specified goods bear the brand name or trade name of another person. Explanation IX shows that the decisive element is a connection in the course of trade between the goods and the person using the mark. On the facts found, the goods were manufactured to the customer's specifications and supplied entirely to that customer for its own use, with no evidence that they were traded in the market as such. The Board's Circular dated 27-10-94 clarified that where there is no trade of such goods, and where goods are made to order and sold to the manufacturer for its own use, the exemption is not to be denied. The reasoning in the Larger Bench decision relied on the same principle, namely that use of the customer's mark does not amount to use in the course of trade when the goods are not marketed as branded goods.

Conclusion: The goods did not bear a brand name within the meaning of the Notification, the exemption could not be denied, and the Chapter X condition did not arise.

Final Conclusion: The appeal succeeded on merits and the demand and penalty could not be sustained.

Ratio Decidendi: Goods manufactured to a customer's specifications and supplied only to that customer for its own use, without being traded in the market, are not goods bearing a brand name in the course of trade for the purpose of denying small scale exemption.

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