Brand name on goods requires a trade connection; customer names on soaps did not defeat small scale exemption.

Names of Government undertakings affixed on soaps manufactured for supply to those undertakings did not constitute a brand name or trade name for paragraph 7 of Notification No. 175/86-C.E. The exemption is withdrawn only where goods bear another person's brand name or trade name, and Explanation VIII requires a trade connection between the goods and that person. Because the undertakings were only users of the soaps and were not trading in them, there was no relevant trade connection and the small scale exemption could not be denied on that basis. Stay was granted in favour of the assessee.

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Issues: Whether the names of Government undertakings affixed on soaps manufactured for supply to those undertakings constituted a brand name or trade name so as to attract paragraph 7 of Notification No. 175/86-C.E. and deny small scale exemption.

Analysis: Paragraph 7 withdraws the exemption only where specified goods bear the brand name or trade name of another person who is not eligible for the exemption. Explanation VIII requires a connection in the course of trade between the goods and the person using the mark. The names marked on the soaps belonged to customers who were using the goods as part of their service and not trading in the goods. There was no sale of the soaps by those customers and no trade connection in relation to the goods. As the customers were merely users and not manufacturers or traders in the goods, the condition in paragraph 7 was not satisfied.

Conclusion: The marked names did not amount to brand name or trade name for the purposes of paragraph 7, and the stay was granted in favour of the assessee.

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